PPH-Pushpay

[Shareguy]

It's been over a month now since the potential takeover was announced. Is it good news or bad news that it's taking so long.

[PeterLynch]

Buy an out of date, cookie-cutter app, being used in a single industry, in which all the insiders have sold out.



They're obviously doing an Elon Musk and trying to get a 40% discount.

[Fiordland Moose]

It's been over a month now since the potential takeover was announced. Is it good news or bad news that it's taking so long.

I'd say the length of time being taken is so far normal shareguy

[PeterLynch]

I'd say the length of time being taken is so far normal shareguy

Probably end up like 9Spokes. Buyer running for the hills after opening the hood.

[Fiordland Moose]

I'd say the length of time being taken is so far normal shareguy

Probably end up like 9Spokes. Buyer running for the hills after opening the hood.

could do - I dunno. These M&A processes are getting harder in this market.  And PPH have its share of baggage so no one would be surprised if something came up during DD.

They are long drawn out processes particularly for companies of this size

[Shareguy]

The price seems to be holding at least.

[nztx]

Hold on to the sides boys & girls - things are starting to drift again

the brokers magic fairly dust clouding things looks like it's dispersing into thin air ..

[Shareguy]

Positive development

Pushpay Holdings Limited (NZSX:PPH, ASX:PPH, 'Pushpay' or 'the Company') is pleased to announce that it has welcomed the Archdiocese of Seattle, Washington, US as a Catholic Customer. The Archdiocese of Seattle will be leveraging ParishStaq, the Company's integrated technology platform to help parishes and dioceses increase engagement and grow their communities.

The addition of the Archdiocese of Seattle as a Customer represents an opportunity to reach 174 parishes and a Catholic population of over 600,000 people. Pushpay continues to make progress on executing against its Catholic product development plans and attracting new Catholic parishes. The planned addition of this Customer is an example of the growth opportunity as the Company continues to execute on its longer-term expansion strategy.

Molly Matthews, Pushpay CEO said, "We are delighted to welcome the Archdiocese of Seattle to Pushpay. Bringing this wide-reaching community onboard represents a significant early milestone for Pushpay as we continue to execute towards our Catholic growth strategy. We are excited to be a part of their growth into the future as we continue to innovate and deliver technology that enables an integrated way for parishes and dioceses to engage with their community."

[Minimoke]

I used to hold pph but sold it a while back. I would really like to see them diversify out side church giving and usa ( but there is a very large number of religous people in the usa

[Shareguy]

Purchased some more today. Have a good feeling. Might be wrong though.

[Shareguy]

Well I brought some more yesterday and now have a decent holding compared to the rest of my portfolio. My thoughts are

Craig's are bullish and Forbar have Pushpay as the largest PE discount to 5 year average on the NZX currently.

FB state current PE 25. 5 year average 52= 51 percent discount.

I have gone back a while and found Acc buying at $1.30 and of course sixth street buying Hulijich's 17 percent shareholding  at $1.85.

We have been advised that there are several interested parties in acquiring Pushpay.  So what price if this happens is acceptable?

Craig's have as outperform at $1.76. They have had a recent win in the catholic sector and have also moved their intellectual property over to the US, which to me is an important step given that it makes sense to move listing to US. (Not that I want to loose another from NZX)

I'm thinking if any takeover proposal is acceptable it would at least have to be north of $1.85 which is what sixth street paid for their 17 percent stake, unless the company's future prospects have diminished.

Even if the takeover does not proceed, I still like the potential growth and future prospects and would think it's only a matter of time before it moves to the US in some form.

Im thinking the current price is still an attractive entry point without the takeover.

Note there has been 2 large trades this week.

I see this as a higher risk opportunity but with some good upside either way. 

What's your thought?

[Shareguy]

From Craigs latest research

What price?
We think a deal makes sense, the only real question is price. PPH shares have performed very poorly over the past six months, and even today are still down some c35% from its highs late last year of c$2/share. We also note Sixth Street paid $1.85 to acquire its 17% cornerstone stake. This raises the question of whether a bid at only a modest premium to the current market price might be rejected as too opportunistic.
Recent transactions
There have been several recent transactions in the faith sector, although they provide only a limited steer on what PPH might be worth in our view:
Blackbaud's acquisition of EVERFI for US$750m in January 2022, at a forward EV / Revenue multiple of ~6x. EVERFI is growing top line growth faster than PPH (at c20% vs c8-10% organic for PPH) but appears to be less profitable.
Reverence Capital Partners acquired a majority investment interest in Ministry Brands announced in December 2021. Ministry Brands owns several direct competitors to PPH, including F1, LPI, Parishsoft (the latter two in the Catholic market) and a number of legacy providers. No public data is available on the multiple paid for this stake.
Mindbody (MB.NAS), which we consider to be the closest comparable listed company to Pushpay, received a takeover offer on Christmas Eve 2018 from private equity firm Vista Equity Partners. The offer price was a 68% premium to the prevailing share price and represented a 6.4x EV/CY2018 gross revenue multiple based on Bloomberg consensus estimates. While we do not wish to draw too long a bow, we note Mindbody was then of a comparable scale to Pushpay today in terms of enterprise value and revenue, and has a similar business model selling mobile payments services to a "SME" customer base (but gyms rather than Churches). An important difference was that Mindbody's losses were significant and widening at the time of the takeover, whereas Pushpay is highly profitable.
The table below indicates the fair value for PPH based on gross revenue multiples of 4-8x, based on the midpoint of PPH's FY23 gross revenue guidance range (US$228m). 6x gross revenue implies a fair value of $1.80/share. We note our DCF valuation is only modestly lower than the multiple-based valuation. For reasons already discussed, the potential to extract synergies by an acquiror which already has assets in the faith sector could support a higher valuation still.
   Gross revenue (FY23e, US$m)
 Multiple
 Implied EV (US$m)
 Equity value

[Shareguy]

Speaking to a broker today who said there had been some very large volume going through since possible interest was announced.  Broker stated that even if nothing happens still great buying and worth at least the $1.85 that six street payed for their shares.

I'm thinking an update would be good.

[Shareguy]

Thought this was well written.

https://www.interest.co.nz/investing/117262/tony-morgan-uses-takeover-uncertainty-swirling-around-pushpay-holdings-example-how

[winner (n)]

Deal must be off .... although Push quiet in response to media reports

Share price under a buck today?