|Personally I'm holding & running, and expecting more than 6p. But agree that on what we currently know, the likely outcomes are either:
|The result is likely to be binary, 2.75p or 6p, so probably 1.5p of upside and 1.5p of downside. Not a great risk/reward unless a strong opinion about the outcome.|
|In % terms, we are still miles away from the 6p cash indicated offer.........any fresh thoughts?|
|Remember there is currently plenty of money sloshing around in the private equity world which frankly needs to find a home, as otherwise the LLP partners cannot charge their hefty 2:20 fees.|
|It looks like the market thinks Servicepower can't deliver on 6p along with everything else where it has matched management's expectations.
6p was fins price target.|
|Dan_the_Epic - You appear to be incredibly immature or have some narcistic personality disorder - your need to label people 'silly' and demean them is really repulsive, all of your points are easily answered:
A) example - cost of maintaining a separate stock market listing is usually around at least £200k a year, so YES you CAN easily if it is part of a larger group reduce the cost.
B) A capitalised assets costs are historic by their nature, they don't have to redesign they whole thing every year from scratch
C) It's the very simple known business principle of MARGINAL sales, the cost is same regardless as there's no raw materials ,if you produce an addition car and sell it then you have the cost of steel etc. , sell another software licence and you don't, it's why someone like Micorsoft has such astonishing high margins
D) The whole point of a takeover is often because there's value to be released, it can still be a bargain for the purchaser even at a massive increase over a present lowly valuation.
As for an example , Google's takeover of Youtube, $1.6 billion for a loss making company with only 65 employees at the time ,turned out to be one of the best takeovers in history for google.|
|Well first of all you're being silly to even suggest a company could get taken over at a 1000% premium. Go find an example of such a premium. It would be corporate suicide, and totally stupid, so yes, it is pretty ridiculous to even suggest it.
Now to your points in turn:
A) The salary paid is ridiculous. We can all agree on that. You could perhaps halve it to £125k (or a bit more), for a divisional MD. Great, but £125k is miniscule for any seriously sized company. Admin costs are £7m. What makes you think those costs can be reduced by the balance of £875k without damaging the top line? Staff costs alone are £6m in total.
B) You say the software is already developed, yet alone they are capitalising/investing £1m a year in R&D etc, with 26 staff etc. It could all be a monumental waste of money, that I agree with, or perhaps this outlay is required to just maintain the current level of sales.
C) Nothing to suggest a 10% bump in sales will lead to a proportional profit rise. Funny way in business for new costs to be found as sales rise.
D) With the track record of this lot, and the size of this company and the reliance on a few contracts etc etc., who in their right mind would pay a PE of 12. Something like 7-8 is the more realistic ballpark, or maybe 9-10 maximum with a premium.
It's easy to say, cut these costs, push these numbers up, and SVR is very attractive, but there is a reason why those things haven't happened. Partly management probably, and also probably partly because things are not as rosy as you may think.
Rest assured, if this was such a stonking bargain that even a 1000% premium could be paid and it would still be cheap, then this would have been snapped up AGES ago. It hasn't and that tells you all you need to know.|
|Dan_the_Epic reference your pathetic and demeaning "if you can even comprehend writing that sentence", see below:-
Just Ms Martin alone gets paid 1/4 million pounds a year, (out of only £13 million sales for heavens sake!), that wouldn't be needed as part of a larger group , structural saving in overhead of £1m easily achievable.
Any additional sales flow to the bottom line (as the software is already developed), even an easily achievable miniscule growth of 10% sales and 5% price increase gives additional £2m .
So buyer could easily instantly get £3m profit a year from the first year (1.5p earnings/share) Gartner predicts 20% growth in SaaS market just from trend, so after 5 years that £3m could easily be around £6m and you may expect a buyer to think it can improvement on that.
So even conservatively, at a market average 12 p/e gives 12x3 = 36p/share ,and that's without a takeover premium.|
|Wow, roller coaster day, interesting to see trading tomorrow...|
|Constellation may have to stop low balling on its bids.|
|SVR will fly tomorrow! http://www.investegate.co.uk/servicepower-tech---svr-/rns/diversis-capital-llc---statement-re-possible-offer/201611221818218842P/|
|Its worth having a look at the trades for today.
Why was Constellation's notice posted at 4.24.
How did someone get a trade in between SVR's RNS and the close and before MMs knew.
Look at the bid trade late trade just after lunch - did they know about Constellation?|
|One never knows but the Diversis bid could actually flush out some other interested parties, and perhaps even bring Constellation back into auction if there is an agreed offer.
If not, then its up to Marne and her team to finally deliver on all the promises...|
|Even 6p is exceptionally generous IMO.
Bargain at up to 30p? You've lost your marbles. I think you struggle to understand how companies should be valued if you can even comprehend writing that sentence.|
|What a difference 7 mins makes!
In effect looks like a minor bidding war, 6p was minimum I was expecting but 10p is what the floor of valuation should be, it's such a low market cap that many companies could just pay for it all from cash sitting in the bank and get a bargain even up to 30p|
|Just checked out Diversis, and they seem to be credible - US west coast (Santa Monica, CA) based private equity house. Don't hold your breath though|
|6p lol I said on here last year they would orchestrate a management buyout as this aint worthy of a listing.
Diversis/white knight/ etc etc same as.
They are pulling the rug from under yer feet at 6p.
|Or maybe not so fast...
"In response to the announcement made by Jonas today, the Board confirms that having carefully considered the Offer together with its advisers, that it has concluded that the Offer undervalues the Company and has formally rejected the Offer.
The Board also confirms that it has received an approach from, and is in discussions with Diversis Capital, LLC ("Diversis") in relation to a possible cash offer being made by Diversis or through a wholly owned entity of Diversis for the entire issued and to be issued share capital of ServicePower (the "Possible Offer"). The approach has been made at an indicative price of 6 pence per ordinary share of 1 pence each in the capital of the Company. The Board would like to emphasise that these discussions are at a preliminary stage and that there can be no assurances that such an offer will be made for ServicePower, nor as to the terms on which any offer will be made. Shareholders are advised to take no action."|
|Well at least the shares weren't pricing in an especially high take-out price. Back to 2.5p I guess...
"On 10 November 2016, Jonas UK announced that it was in talks about a possible offer with ServicePower. Following further discussions, Jonas UK has concluded that it does not intend to make an offer for ServicePower."|
|with regards to the 1 million +8% loan due 16/12, would this be factored in any valuation or will they pay it when its due?|
paul the octopus
|errrrr 10x sales is 59p per share................!!!!!!!!!!!!!!!!!!!|
|Back in 2014 Servicepower partnered with servicemax to extend servicemax's capabilities. It would seem an ideal opportunity for servicemax to pick up servicepower's technologies on the cheap.
"Landmark Agreement with ServiceMax
Agreement expands reach into Force.com customer ecosystem
ServicePower (AIM: SVR), a market leader in field management, today announces a new agreement with ServiceMax, the only global, completely native Force . com field service application in the industry.
Under the agreement, ServiceMax will integrate ServicePower’s patented schedule optimisation product, ServiceScheduling, recognised as the leading optimisation technology for large workforces, into OptiMax, ServiceMax’s workforce optimisation module available on the Force.com AppExchange.
The integrated solution enables the companies to provide a unified, single vendor field management solution to a multitude of field service organisations, across geographies and industries, including medical devices, oil and gas, and utilities where customers are looking for the Salesforce CRM and well developed optimisation capabilities.
Marne Martin, CEO of ServicePower commented "Our relationship with ServiceMax creates a unique competitive offering in the field management industry, capitalising on the strength of our patented optimisation technology, and the breadth of the Force.com platform on which ServiceMax has built its 100% native solution. As a single vendor solution for global field service organisations, we can provide clients productivity and efficiency improvements, in addition to Force.com’s CRM features through Optimax. While increasing our penetration of the Force.com customer ecosystem, the partnership also expands our sales footprint to new geographies around the globe.”
Dave Yarnold, CEO of ServiceMax. Added, “Our integration with ServicePower enhances the ServiceMax platform with industry recognised optimisation technology, further extending our ability to provide an end to end, field service management solution to the Force.com ecosystem, and beyond.”2|
|IMO, Constellation could now want to buy SVR even more because it is one of the only "independent" field service software developers (of any scale) available.|
|Interesting announcement today that GE Digital has just agreed to buy rival ServiceMax (according to Forbes) for $915m, equivalent to an estimated 10x-15x 2016 sales.
NOV 14, 2016
Forbes Billion-Dollar Startup ServiceMax Sells To General Electric For $915 Million
ServiceMax, one of the companies on Forbes’ recently-published list of next billion-dollar startups, announced today that it was being acquired by Boston-based General Electric for $915 million. GE said in a press release that it will rely on ServiceMax to make field operations more efficient. GE was already using Service Max’s software. “It’s no secret that our services revenue is the bulk of our earnings and is a key part of what makes us successful,” Bill Ruh, CEO of GE Digital, told Bloomberg. “We’re moving away from where it’s all on paper to where it’s all becoming fully automated. Services are becoming a key part of the digital economy.”
GE Digital was established just last year and is based in San Ramon, CA, on the outskirts of Silicon Valley. ServiceMax is also in San Ramon. GE has said that GE Digital could become a $15 billion business by 2020.
ServiceMax sells cloud-based software that helps field service workers like elevator repair people and oil rig workers, do their jobs. Instead of responding to an appointment booked by phone, filling in a work order by hand and waiting for customers to send in a paper check, workers can use ServiceMax’s software to track equipment maintenance and manage schedules. It also records which parts are in stock and monitors problems as they arise on devices like CAT scan machines. When a machine needs service, the software sends out an alert.
Two of the founders, Athani Krishna and Hari Subramanian, both 46, are natives of India who came to the U.S. to work as software engineers and started the company in Pleasanton, CA nine years ago. It now has offices in India, the U.K. and a dozen other countries.
It had raised a total of $204 million in investment capital. In 2014, the company achieved a reported $450 valuation. That was before its last capital raises of $82 million in August 2015 from Premjiinvest, the firm that invests the personal wealth of Indian tech billionaire Azim Premji. ServiceMax’s estimated revenue for 2016 is $60 million. The company has some big competitors including SAP, Oracle and Salesforce but the worldwide market for field service work has been estimated at $18 billion.
In its acquisition announcement today, GE threw out an even larger number. “GE estimates there is a market-wide opportunity to improve service productivity by $25 billion through the use of analytical tools,” it said in its press release.
In a prepared statement, ServiceMax CEO Dave Yarnold said, “The transaction will help position ServiceMax to reach its next phase of growth by having access to GE’s broad and advanced industrial portfolio, deep domain expertise and substantial customer footprint.”
The deal is expected to close in January.|