Equals Share Discussion Threads

[tomg23] 03/11/2023 16:22

That was never in question though. They say in the RNS that the company has contacted a limited number of counterparties. So pretty clear to me

[eeza] 03/11/2023 16:17

Well Fleetcor seem to make it plain that they were approached, and not the other way round.

[earwacks] 03/11/2023 16:14

As Paul suggested it looks like their hand was forced to issue an RNS about speculation of talks. Whether they needed to name companies is not so clear. Early days. If the other one pulls out it will look a bit strange. No smoke without fire

[eeza] 03/11/2023 16:07

Management's judgment looking poor.

[qs99] 03/11/2023 15:59

Interesting, was it slightly "naive" RNS from Equals with such a quick rebuttal from Fleetcor?

[ashleyjv] 03/11/2023 15:46

One potential bidder has said they are not interested

[boozey] 03/11/2023 15:44

Well what is that drop all about I wonder..

[brummy_git] 03/11/2023 13:33

I talked about Equals here with Justin Waite on Vox Markets earlier today (starts 13:45).

[alter ego] 03/11/2023 13:02

having listened to Paul Hill, I decided to add to my holding. Could be a win win situation. Either a bid or continued organic growth. DYOR of course.

[qs99] 03/11/2023 12:47

Tremendous buying still IMO....DYOR

[qs99] 03/11/2023 10:12

Anon12345 that is a great post thank you and gives some context to the share price and what would need to be paid to win the day for buying Equals. Personally given the upside and years taken to build a market leading position I would prefer nearer £2+

Let's see

DYOR and GLA!

[carcosa] 03/11/2023 04:11

Brummy,

1) The 'media' report was not mainstream media and also behind a paywall. The change in share price was less than 10%. What was the justification for releasing the RNS? i.e. was it used as an excuse to reach potential other acquirers?

2) Presumably Equals canvassed the opinions of major shareholders prior to embarking on this exercise. What terms would you think be acceptable to them given that major shareholders tend to take a longer investment horizon compared to retail investors.

3) What do you believe prompted Equals to seek a Strategic Review?

Cheers
Carcosa

[anon12345] 02/11/2023 21:31

I went back through Fleetcor's filings and transcripts - the two directly relevant acquisitions Fleetcor has done are:

1) Cambridge (2017) - $690m price for $125m revenue and $50m EBITDA, thus 5.5x revenues and 14x EBITDA.

2) AFEX (2021) - $460m price for about $80m revenue, EBITDA unknown but "far less profitable" than Cambridge - 5x revenue.

Fleetcor can pay big revenue multiples because they get large gross margin and opex synergies.

Equals would be an easy plug and play into Fleetcor's CorPay division, and they could probably get Equals from today's ~20% EBITDA margin to ~30% or higher within 1-2 years with their M&A approach.

With the above info, it isn't hard to see Fleetcor paying 3x revenues for Equals. That'd be £1.75 share, roughly, on a fully diluted basis.

[colinroberts] 02/11/2023 20:53

Brummy... My view is that this Strategic Review is all about Equals Money Europe. The CEO has said that EME will be running by end of year and that they will be initially focusing on selected parts or countries of the EU. But time is of the essence - given that they currently have the leading technology they will want to exploit that advantage asap in the EU. It's going to take other companies time to develop similar tech, but they will get there sooner or later. With access to much deeper pockets via a takeover (or partner), EQLS would have the resources to be able to go for a much bigger slice of the EU cake straight away, while their offering is still unique. Any comments welcome.

[earwacks] 02/11/2023 20:21

Brummy. Much appreciated. Obviously you know the company better than most. So many thanks. Look forward to it. Cant think of a specific question, but on the fundamentals alone I think we are all surprised that the share price has not rerated further. EQLS has outperformed from the period of time when they were competing with ‘no fee companies’ which is not a realistic base. Maybe somewhere between there and the float price is more realistic, since when the business has and seems set to grow considerably with or without a partner or takeover. Maybe it is a question of help to accelerate the business to stay ahead of the game

[melloteam] 02/11/2023 19:00

Just to let shareholders and prospective investors know that Equals Group will be one of the companies presenting at MelloLondon.

The event will take place at the Clayton Conference Centre, Chiswick on Wednesday 29th and Thursday 30th November, where you can expect over 700 investors, 50 Aim listed companies and 10 or so Trusts and Funds.

Tickets are still available and if you would like one at half price then enter the code MMTADVFN50.

For more information, visit

[66fingers] 02/11/2023 18:39

Brummy, your thoughts on the strategic review would be interesting and also what are equals' prospects in the event they remain independent? Many thanks in anticipation.

[thelongandtheshortandthetall] 02/11/2023 18:35

Brummy.
as alluded to above^
Do you know if IST has any stock options that vest in the case of a take over at a certain price etc.

Cheers :)

[aishah] 02/11/2023 18:11

Management frustrated with current market valuations imo. Read all the recent statements. Don't blame them exploring other avenues to get a better outcome

[mcl1] 02/11/2023 17:29

Strange people selling into the rally on the EQLS announcement. It would seem to have substance to it, so why sell at this point. It's not as though they're trading at a big premium to recent highs.

[brummy_git] 02/11/2023 17:18

In the event anyone would like to ask me any investment related questions - say even wrt my thoughts on Equals' Strategic Review.

Then I'll happily try to answer them LIVE here at 9.30am tomorrow.



Disclosure: Equals is the largest position in my portfolio.

[earwacks] 02/11/2023 16:33

Just hope this doesnt turn into a SMV type bid where deadline after deadline gets extended for several months. Think you are right eeza. Opportunist offers come and go like confetti, but once negotiations are being considered the market has to be informed even if no formal offer has been made. The first thing that strikes me in the RNS is ‘they would prefer to remain independent.’ You hardly put yourself up for sale and court suitors if that is the case. Its like ‘does anyone want to go out with me? let me know and I’ll consider but would prefer to be on my own thank you. Could be a form of defence, the best being attack. Put it out in the finance community that one of the best respected rising fx companies could go to a competitor. That might rattle a cage or two.Someone who claimed he was in finance on Stockopedia suggested that Agfx was a better company. That did make me laugh . I mean really? Maybe now they have offloaded the two founders and are ‘trying to go digital’, have spent a load on hiring and now firing, doesnt sound like a company going anywhere fast.
I know it is a competitive arena and they all claim to have the best technology but if these guys can expand and not have to compete by being the cheapest, but by providing the best reliable service, then there is likely to be some truth in that.They get my vote with either outcome.

[eeza] 02/11/2023 11:54

I think the RNS was only released because there had been a leak of the info. And so were forced to put out the RNS by the regs.