In the next few posts we go overseas for M&A activity in the Mass Market Hosting sector. Our first stop is Norway.
In August 2006 Mamut ASA acquired the remaining shares of mass market hoster Active24 ASA is did not already own.
Mamut acquired Active24 for NOK 6.50 per share. (That's Norwegian Kroner for those of you who want to know. It trades at about 1 NOK for $0.15 USD)
Mamut is a Norweigen based software company offering a variety of business applications from accounting to CRM. It's about the same size as Active24.
For the quarter ending March 31, 2006 (1Q06) Active24 had revenue of 54.2 MNOK and EBITDA of 5.3 MNOK (That M in front of the NOK means millions.) So if we annualize the 1Q06 we get 216.8 MNOK in Revenue and an EBITDA of 21.2 MNOK.
Active24 had about 39.2 million shares and in-the-money options outstanding. Multiply those shares by 6.50 and we get a market cap of 254.7 MNOK. Mamut also acquired Active24's assets and liabilities which included current assets of 104.9 MNOK and liabilities of 161.2 MNOK. After adding the assets and subtracting the liabilities from Active24's market cap we get to an enterprise value of 198.4 MNOK.
If we divide that into the annualized revenue and EBITDA we see that Mamut acquired the remainder of Active24 at a Price-to-Revenue multiple of 0.90x and a Price-to-EBITDA multiple of 9.4x.
That's a little high for an EBITDA multiple and little low for a Price-to-Revenue multiple. A closer looks shows us that Active24's EBITDA margin was only about 10%, which is a little low for a MMH. In fact the same period the year prior Active24 had similar revenue but 7.3 MNOK in EBITDA. At that margin Mamut would have paid 6.6x EBITDA. That EBITDA multiple seems more appropriate for a "no-growth" situation. I am sure Mamut hopes to get margins back up post acquisition.
Mamut trades on the Oslo Stock Exchange and I do not own any of it.
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