Bravura Solutions emerged from a trading halt early Thursday to announce an equity raising to enhance balance sheet flexibility and provide additional capacity to invest in growth opportunities, including the proposed acquisition of GBST.
On 12 April 2019, Bravura submitted a non-binding indicative proposal to acquire all of the shares in GBST Holdings.
“While there is no certainty that the GBST indicative proposal will result in a transaction, the GBST indicative proposal is expected to create synergies and client value creation opportunities (subject to due diligence), and based on consensus expectations, is expected to be EPS accretive in the first full year of ownership (excluding any integration/transaction costs),” the company said.
“Shareholders should note that the GBST indicative proposal remains subject to several conditions precedent, including (but not limited to): completion of due diligence to Bravura’s satisfaction, the unanimous support and recommendation of GBST’s board of directors, receipt of regulatory approvals, and execution of a scheme implementation agreement on customary terms and conditions for a transaction of this nature and reflecting the results of due diligence.”
In 1H19, Bravura delivered revenue growth of 24 per cent, EBITDA growth of 28 per cent and NPAT growth of 15 per cent. Wealth management revenue increased 24 per cent and EBITDA increased 36 per cent in 1H19, following two new Sonata contracts, expanding project work and increasing demand from existing clients.
Funds administration revenue also increased 23 per cent in 1H19, benefiting from increased implementation and development work arising from a renewed and enhanced contract with a significant global client.
The ASX-listed company confirmed that it is actively exploring a number of growth opportunities including acquisitions and product functionality enhancements to support expansion in existing geographies and into new geographies and markets.
“These include a number of adjacent geographic markets that are currently demonstrating (or are likely to demonstrate in the near term) characteristics similar to the ones in which Bravura currently operates, such as an increasingly sophisticated financial services economy, more complex financial products, and increasingly complex financial services regulation,” the company said.
“These opportunities may be pursued through acquisitions, development co-funding with an existing client who wishes to enter a new geography and/or market, or with further R&D spend (on a market by market basis), or with any combination of these.”