iSentia to be acquired by Access Intelligence creating global offering
Struggling iSentia has had a takeover offer from Access Intelligence, which is subject to shareholder approval, after 12 months of its share price and market value plummeting.
Access Intelligence will acquire 100% of the share capital in Isentia it does not already own at a price of A$0.175 a share.
Under the offer, iSentia shareholders will receive A$0.175 per share in cash, this implies an enterprise value of A$67 million.
Access Intelligence is a Software-as-a-Service (SaaS) solutions provider for the PR, communications and marketing industries. Its technology is relied on by more than 3,500 organisations every day, from global blue-chip enterprises and world-leading marketing agencies to public sector organisations and not-for-profits.
It reported an annual revenue increase of 42% year-on-year to GBP19.1 million in November 2020, and a range of new clients including Amazon, Astra-Zeneca, Boots, Chanel, Dow Jones, Hulu, Levi Strauss, LinkedIn, Lotus, Nintendo, Publicis, Saatchi & Saatchi, Twitter and WWF.
In December 2020 it announced a GBP10 million (before expenses) equity issue raising and secured a GBP2 million three-year facility under the British Government’s Coronavirus Business Interruption Loan Scheme (CBILS).
Access Intelligence chief executive, Joanna Arnold, said: “iSentia is a leading media intelligence company in Australia and across the Asia Pacific. Access Intelligence and iSentia are aligned culturally and strategically, and customers will benefit from a product offering that gives them more choice with a broader geographical reach. We look forward to combining businesses and serving the Asia-Pacific market.”
iSentia’s chief executive, Ed Harrison, said: “Access Intelligence has a strong track record in delivering successful products to PR and comms professionals, not least through their powerful social media platform, Pulsar.
Harrison, CEO of iSentia
The acquisition will create a global media monitoring business, bringing benefits to clients.
The acquisition will give iSentia’s customers access to a broader suite of products. However, iSentia will continue to invest in its existing portfolio of products including the upcoming launch of the new iSentia platform and completion of the move to real-time broadcast monitoring. For the iSentia team this represents the opportunity to be part of a wider global organisation”
Pulsar provides real-time data analysis of social media, search data and online conversations globally in more than 170 languages. Pulsar provides brand strategists, marketers, PR and product designers with actionable consumer insights, as well as insight into the performance of their owned social media channels.
Joanna Arnold, chief executive of Access Intelligence
Arnold intends to relocate to Australia for a minimum of 12 months following a successful deal. In the initial phase of the integration each business will operate independently with a team of Access Intelligence’s senior executives working directly with iSentia’s management team to combine the businesses.
The shareholder vote is scheduled for 9 July, with the First Court Hearing Date scheduled soon after on 16 July. If all proceeds, the Scheme Meeting will be held on 17 August 2021 and the scheme implementation would occur on 1 September 2021.
iSentia’s share price the past 12 months [click to enlarge]
A statement from the company in May said that the redundancies and subsequent promotions in the Australian and New Zealand Commercial division were “in line with the automation of client services, including the broadcast transformation program,” and as a result “some manual processing roles aren’t required”.
iSentia’s market capitalisation was down to approximately A$13.34 million last month, according to the Australian Securities Exchange (ASX) with a share price of A$0.068 to A$0.070. This is in stark contrast to its former value of close to $1 billion in December 2015 (A$986 million) and a share price of A$5 in the corresponding period. It was during that time that the business purchased the failed King Content.
In the past three years, its half year revenue has dropped from A$67 million in the first half FY2018, to A$41.8 million in its most recently reported half for the six months to 31 December 2020.
The company’s revenue for the first half of the current financial year was impacted by a cyber incident in December 2020, creating an estimated $4.4 million impact on earnings before interest and taxes, and A$3.3 million in revenue, according to the financial report.
That amount is expected to rise to A$7-$8 million for the full financial year results. iSentia does not report quarterly financial earnings.
During the first half of financial year 2021, iSentia refinanced the bank loan facilities with the Commonwealth bank of Australia (CBA). This equated to a three-year $46.6 million loan facility including A$33.5 million amortising facility, a A$12 million revolving cash advance, a $1.1 million revolving working capital, letter of credit and bank guarantee facility and ancillary facility. Under the facility, iSentia is required to repay a principal amount of A$750,000 per quarter, with the first repayment due on 30 June 2021.
As a result of the cyber incident, CBA has reset iSentia’s banking covenants to 31 March 2022. “However, there is limited headroom in the group’s forecast covenant compliance, and a failure to meet its forecasts may result in a covenant breach,” according to the financial reports.
In April, the iSentia board saw Abigail Cheadle resign as an independent non-executive director after just two years. She has been replaced by Peter George, executive chairman of ASX-listed Retail Food Group and previously managing director of PMP Limited from 2012-2017. He also previously served as non-executive director and chair of the Audit and Risk Committee for Asciano Limited, executive chairman of Nylex Limited and was a member of the Optus Communications Board.
