QIP Issue openes today…Floor Price fixed at 879.54
Actual Amount raised and actual pricing (in case of any discount) of the issue will be key monitorable in addition to the planned acquisition profile as this will be the biggest acquisition post ADI acquiring MPS in 2011.
http://www.bseindia.com/xml-data/corpfiling/AttachLive/MPS_Ltd_160315.pdf
Rgds.
Discl. - Invested
Any updates on the actual amount raised? When does the issue close?
Disc - Invested with a long term view.
Ravi…issue will most probably close by Thursday , 19th March 2015…other details will only be known post that.
Rgds.
QIP Issue closed yesterday…150 cr. raised…equity capital now stands at 18.6 cr. (1.86 cr. shares)…priced at 5 % discount to floor price at Rs. 836 per share…book closed in quite a hurry it seems…
who are the allottes will be interesting to watch…
may be near term negative for the stock unless acquisition is announced swiftly…
Rgds.
Discl. - Invested
Yeah, I was actually quite surprised @ the 5% discount.
Icici report on MPS dated 24th March 2015…link attached…Target Rs. 1200…
http://content.icicidirect.com/mailimages/IDirect_MPS_NanoNivesh.pdf
The key now is acquisition profile & financials…post MPS this will be the biggest acquisition for nishith arora…almost double the ev if we take into account entire 150 cr…the profile and financials of acquisition will therefore be key…
Out there many distressed assets are available like Swets which was associated with MPS Insight platform and filed for bankruptcy recently…how mr. Arora picks the acquisition & whether he likes to go for such heavy distressed assets will be interesting to see as such heavy distressed assets are not that easy to turnaround.
Rgds.
Discl. - Invested
Hdfc & Goldman Sachs buy into MPS qip…
Post qip, Goldman Sachs holds 3.01 % while HDFC funds holds 4.81 % equity of MPS Ltd
Mahesh, don’t you think it’s quite highly valued. I like the team, capital allocation but feel it’s running ahead of fundamentals - PEG is almost 1 and offers no MOS.
Any views ?
Hi Vardha,
If organic growth doesn’t start, it’s surely fairly valued…but, such a quick raising of 150 cr. via qip and that too at 836 per share, makes me think that one big or two mid-sized acquisitions are round the corner…because of that entire calculation changes…
Look this will be almost double the size of MPS acquisition done in 2011…and that EV I am talking about and not the actual value paid…the way Mr. Arora is inclined to as we have seen in all the three acquisitions, MPS, Element & EPS…he likes to acquire distressed assets and then turn them around…distressed assets come at almost half the sales…so if with this acquisition he can buy 300 cr. + revenue then it will take it to again second largest player in its segment after Aptara…this will change the entire calculation and shift the trend towards MPS again where it was loosing so far…remember all other comparable size peers of MPS are growing organically at 15 % + consistently without any difficulty…
Then comes the margin picture, as distressed assets don’t bring with them margins and in fact are mostly loss making…so here the skills and synergy of Mr. Arora & MPS will be tested…if this acquisition also faces the same fate as MPS in terms of turnaround, the current rate might also look cheaper few years down the line just as 150 or 300 rate is now looking cheaper…
If we look at other scenario and assume he acquires platform business in a way where he can find readymade sales ground for its existing products…such acquisition might not bring with it rich revenues like say he will need to spend 150 cr. for buying 100 cr. revenue…but what will happen is in that initial scale up of revenues will be much faster and margins will be far richer at 40 % +…
All these are assumptions we are making and unless we get hold of profile and financials of acquisition nothing can be said firmly…however, one thing is clear we are able to ride the entire lifecycle in case of MPS with Qip being only the first milestone, others like, acquisition, split, etc. still remaining…frankly speaking wasn’t expecting such a maximum quantum of 150 cr. being raised this quickly and that too with promoters stake at still 68 % thereby keeping future growth funding triggers intact…this is the reason why I covered all my sold position and in fact added more as fresh investment between 885-910…
Rgds.
Disco. - Invested
To add from the last post Vardha…for ex., as you must have noticed, Swets, which is associated with MPS for its MPSInsight platform, filed for bankruptcy recently…Swets is associated with 20,000 publishers and was one of the prime subsciption agent…now, if MPS is able to get hold of some assets, say IT assets,of Swets and inturn can get direct reach to 20,000 odd publishers with which Swets was associated, it could throw open a wide opportunity which we have not yet imagined and is beyond our present calculations…in such a case, the purchase price will be cheap because its a distressed asset, but, for a part, MPS could pay higher than other suitors as it will be of more value to MPS than others for whom entire Swets assets in combination will be of value…however, please remember that this is just an example I am giving rgdg. what is unseen and not drawing any conclusion as purchase of part of such bankrupt company is not easy as sometimes observers decide against it…
Rgds.
Discl. - Invested
[Note -
This post should only be viewed as part of a general discussion and in no way is a buy/sell/hold recommendation on any company. This should not in anyway be taken to draw any conclusion or build any investment/divestment decision. ]
@Mahesh: a quick question. After the QIP, what is the equity dilution in %? Thanks in advance.
)- Ravi
Disc: Invested, looking to add more.
from NSE Press release of MPS:-
MPS closes Rs 150 crore QIP with participation from HDFC, Goldman Sachs, and others
Issue of 1,794,258 shares at Rs 836 per share
Delhi, March 26, 2015: MPS Limited, a global leader in publishing services, announced the successful closure of
its Qualified Institutions Placement (âQIPâ) of equity shares to raise Rs 150 crore.
The QIP saw participation from four mutual fund houses including one of the largest domestic mutual funds
and FIIs.
Promoter shareholding post QIP is now 67.8% as compared to 75.0% on December 31, 2014.
On the successful completion of the equity issuance, Mr. Nishith Arora, CEO, MPS Limited, stated: âThis is a
strong testimony to investorsâ confidence in our company, as high quality domestic and international
institutional investors have chosen to partner with us. The QIP is an enabler in our strategy to further augment
our global leadership and competencies. The proceeds will be used for selective strategic acquisitions that will
help us to expand scope of our services, add new customers, and enter new geographies.
Ravi…10.66 % is the equity dilution…
before QIP,equity was 1.6822668 cr. shares and now post QIP equity is 1.8616926 cr. equity shares.
Rgds.
Discl. - Invested
Breaking news!!! MPS acquires US based education publishing services company TSI evolve
The purchase consideration details is yet to be known will keep boarders posted…
Meanwhile checkout the link of the acquisition company…
Prima-facie view on MPS Ltd.'s TSI acquisition (acquisition details like cost & size from company management awaited) :
Acquisition of distressed assets continues for MPS…
However, with this acquisition, opportunity of converting work offshore seems to be more than that was with earlier EPS (Electronic Publishing Services) acquisition…
Gaming (Education related) seems to be the additional service line gained with this acquisition in addition to added mathematical content processing expertise…
MPS will also gain some non-overlapping small publishers as clientle with which TSI seems to be working with in addition to strong physical infrastructure…however, how much physical infrastructure MPS will retain post acquisition that remains to be seen as its main focus will be to convert the work offshore…
Acquisition must not have cost MPS more than 5-6 cr. INR and hence QIP proceeds worth INR 150 cr. remain intact…this acquisition might not add more than 12-15 cr. INR in annual revenue in first year of integration.
Acquired company seems a strategic fit and with this and previous EPS (Electronic Publishing Services) acquisition, MPS seems to be moving up the value chain…
Key now is utilisation of QIP proceeds and a slight mid- to big-sized acquisitions as that could catapult MPS into world’s number two position in publishing services & solutions space after Aptara (Ienergizer Inc).
Rgds.
Discl. - Invested
[ Note - This post is part of a general discussion in relation to an acquisition-event and is not a buy/sell/hold recommendation of any kind. This should not in anyway be taken to draw any conclusion or build any investment/divestment decision. ]
As per VC Circle Article, TSI has reported annual sales of $3.06mn and reported net loss of $606000 in financial year 2014. Acquisition cost as per the said article is $1mn.
Hi chintan…already clarification rgdg. acquired co. financials & deal value are provided by the management of MPS…u can access following link…good transparency followed by the company…
http://www.bseindia.com/xml-data/corpfiling/AttachLive/MPS_Ltd1_310315.pdf
FY15 Results on 25th May 2015
MPS Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on May 25, 2015, inter alia, to consider and approve the Audited Financial Results (Standalone and Consolidated) for the quarter and year ended March 31, 2015.
Further, pursuant to Clause 36 of the Listing Agreement and provisions of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 and the Code of Conduct for prevention of Insider Trading of the Company, the trading window for dealing in the Equity Shares of the Company by designated employees including Directors, is closed from May 05, 2015 to May 26, 2015 (both days Inclusive), on account of disclosure of Audited Financial Results of the Company on May 25, 2015 for the quarter and year ended March 31, 2015.
Mar15 results just came out, after market hours
http://www.moneycontrol.com/stocks/reports/mps-financial-results-for-march-31-2015-audited-965943.html
At first glance, it looks weak. need to study more. Stock is going to get mauled for sure.
STANDALONE
Q on Q comparison/ Top & Bottom line
48 cr vs 56 cr and 11.6 vs 16.5 cr
EPS 6.83 vs 9.83 (were there, any one time items last qtr? need to study)
Y on Y comparison/ for corresponding qtr
48 vs 47 cr and 11.6 vs 11.6 cr
EPS - 6.83 vs 6.92
Consolidated Nos
Top - 55 vs 63 vs 52 (Current vs Q on Q vs y on y)
Bottom - 13 vs 17 vs 13
EPS 7.4 vs 10.2 vs 7.8
Disc - Invested and fearful now. we can see much lower level, IMHO. Not a reco//pl do your research
