TSK - TASK Group Holdings

[zs_cecil]

That is true as a statement in itself.

But not true when companies use as a reason for CEOs leaving abruptly.

Yeah, I cannot agree with you more.

[Schrodinger]

I am comfortable with this. The slide with revenue breakdown with McD's dominating highlights the sense in this transaction. It actually makes PLX strong in Australia and the challenge is to translate this into the USA. Looked closely at McD's statement and this gives me some confidence. As mentioned above gaining devs and customers makes the transaction a good move. Would love to know the forecast revenue for TASK and making assumption I would assume a modest 10% growth backing up their reason for selling. Can PLX gain one of the major supermarkets in Australia with this...

[brutus]

They won't be gaining many additional developers. TASK has 62 employees on LinkedIn. Only half that will be in Engineering and they have their own product to maintain, so I don't imagine there is much latent capacity to exploit. I assume they plan on integrating the two systems, which is going to take time and resources. Are the technologies that Plexure and Task are built on similar, and can resources by used across both? With Task having existed since 2000, they could be bringing a lot of legacy software to the party which will require dedicated resource to maintain. Feels to me like the board had cash in the bank that was burning a hole in their pocket and they got pretty desperate finding a way to invest it and grow the business...hopefully the upsell of Plexure software to the Task customer base can be exploited like they hope and it will be the best use of that cash!

[winner69]

So a company trading at 3.3 times sales buys a company for 8.6 times sales

Or is that the other way around

[bullfrog]

I believe it's a good move, the alternative for Plexure is best summed up in the following classic clip...

[Biscuit]

I believe it's a good move, the alternative for Plexure is best summed up in the following classic clip...

Yes, I guess its true that the worst and longest death scene could be improved by speeding it up!

[bullfrog]

“Upon completion, Daniel Houden will be appointed as Plexure Group CEO, filling the recentCEO vacancy, to complement the highly capable management team at Plexure. Togetherwith his brother Dean, Daniel has led the development and commercialisation of the TASKplatform - I believe Daniel and the team will be ideally positioned to deliver the exciting benefitsof this transaction,” said Mr Norman.

Daniel Houden, CEO of TASK, said “Plexure’s personalisation engine is the perfectcomplement to our offering – it will enable us to offer our clients a world-class solution of evengreater breadth. We are excited about joining the Plexure team and accelerating the globalgrowth of the combined business.”

I'm picturing it as the epic final scene in the good, bad, ugly. I like a smooth transition of power

[Leftfield]

Mmm some figures coming out today....

PX1 current shares = 174 mill.
New shares issues to Task = 78.5 mill
New Incentive shares for staff = 20 mill
New Cap raise shares = 35 mill

Thus post merger a total of around $307 mill (76% more shares)

Then there's revenue; Currently FY21 PX1. = $29mill. Task = $12.9 mill TOTAL = $41 mill
Total forecast combined FY 22 Revenue = $45 to $47 mill. (62% more revenue)

I suspect they need to 'overdeliver' on these FY22 revenue projections.

[Schrodinger]

A conservative 5x revenue multiple on the combined group @ $43m puts the valuation @ $215m.

[bulyak]

A conservative 5x revenue multiple on the combined group @ $43m puts the valuation @ $215m.

would be good to see them release a high level plan around growth opportunity. The last group of executives were good at tidying up loose ends/very diligent, but never was there thinking beyond 2 years. There is no "in between" for rev multipliers. Any rev multiplier lower then 5 spells slowish growth. If they can show opportunity which leads to increased rev beyond 50% growth (YOY) then they can start hitting valuations of 10+ times rev. Otherwise this merger will be another NZX sleeper. I'm curious just how fatigued this new executive team will be. 20 Plus years in their current role is beyond fatigue setting in.