On 6 November 2018 (Tuesday), Link Administration Holding Limited (ASX: LNK) announced that Property Exchange Australia Limited’s (PEXA) shareholders have accepted the offer which was made by a consortium comprising Link Group, Commonwealth Bank of Australia and Morgan Stanley Infrastructure Inc to acquire PEXA. Following this news, the share price of the company increased by 2.459 percent as on 6 November 2018.
As per the offer, Consortium will have to pay enterprise value of up to approximately $1.6 billion, depending on the level of final acceptance to the Trade Sale Offer received by PEXA’s shareholders. Currently, the Link Group’s interest in PEXA shareholding is 19.8% and after the trade sale, it will be between 27% and 44%. Link Group is planning to fund its increased investment through available cash and headroom under its existing debt facilities, hence it is not required to raise any equity to complete the Trade Sale Offer.
PEXA is Australia’s online property exchange network and a few days back it was planning to raise as much as $750 million and list on the ASX. However, the company's board recently decided to pull the plug on its IPO plan and accepted the offer of the private sale of the business to a consortium comprising Link Group, Commonwealth Bank of Australia and Morgan Stanley Infrastructure Inc. Earlier on 23 October 2018, Link Group made an announcement regarding its intention to sell part of its current shareholding in PEXA, subject to PEXA proceeding with an IPO. However, as the Trade Sale Trigger has since been achieved, and the IPO has been canceled, Link Group will no longer sell any of its stake in PEXA.
In FY 2018, the Link Group completed the purchase of Capita Asset Services (renamed as Link Asset Services, or LAS) for $1,548 million from Capita plc which represent the group’s strategy to grow through further penetration of attractive markets, enabling it to provide an expanded range of products and services to its clients. LAS acquisition has had a strong positive impact on Link Group as both Operating EBITDA and Operating NPATA benefited from its inclusion in group results. In FY 2018, the board declared a final dividend of 13.5 cents per share, which is 100% franked and together with the interim dividend of 7 cents per share, it represents 60% of NPATA, which is at the top end of the Board’s dividend policy of paying between 40% and 60% of NPATA.
In FY 2018, the revenue of Link Group increased by 54% to $1,198.4 million as compared to the last year. The operating EBIT of the group increased by 53% to $335.3 million and Operating NPATA increased by 67% to $206.7 million. And further, the Statutory Net Profit After Tax (NPAT) of the group increased by 68% to $143.2 million as compared to the last year.
In the last six months, the share price of the group decreased by 12.12 percent as on 5 November 2018, traded at a PE ratio of 25.630x. LNK’s shares traded at $7.500 with a market capitalization of $3.88 billion as on 6 November 2018 (AEST 1:40 PM).
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