IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>The IE considers K1’s A$4.85 offer for <a href="https://www.smartkarma.com/entities/elmo-software-ltd" target="_blank" data-smartkarma-citation="entities:24342:1" rel="noopener">Elmo Software (ELO AU)</a> to be fair and reasonable as it is towards the high end of its valuation range of A$4.39-4.98.</li>
<li>K1 has received FIRB and US antitrust approval. The remaining key conditions are shareholders and court approval.</li>
<li>This is a done deal. At the last close price and for the 23 February 2023 payment, the gross and annualised spread is 1.9% and 10.9%, respectively.</li>
</ul>


The IE considers K1’s A$4.85 offer for Elmo Software (ELO AU) to be fair and reasonable as it is towards the high end of its valuation range of A$4.39-4.98.
K1 has received FIRB and US antitrust approval. The remaining key conditions are shareholders and court approval.
This is a done deal. At the last close price and for the 23 February 2023 payment, the gross and annualised spread is 1.9% and 10.9%, respectively.


Elmo Software (ELO AU)’s Scheme Meeting on 30 January

<ul>
<li>
<a href="https://www.smartkarma.com/entities/elmo-software-ltd" target="_blank" data-smartkarma-citation="entities:24342:1" rel="noopener">Elmo Software (ELO AU)</a> entered a scheme implementation deed (SID) with K1 at A$4.85 per share, a 100.4% premium to the undisturbed price.</li>
<li>The key conditions are a shareholder and regulatory (FIRB &amp; US antitrust) approvals. The scheme meeting is likely in early 1Q23. </li>
<li>While not a knockout bid, it is attractive in the context of current conditions. Key shareholders will vote in favour. At the last close, the gross spread is 4.8%.</li>
</ul>



Elmo Software (ELO AU) entered a scheme implementation deed (SID) with K1 at A$4.85 per share, a 100.4% premium to the undisturbed price.
The key conditions are a shareholder and regulatory (FIRB &amp; US antitrust) approvals. The scheme meeting is likely in early 1Q23. 
While not a knockout bid, it is attractive in the context of current conditions. Key shareholders will vote in favour. At the last close, the gross spread is 4.8%.


Elmo Software Enters a SID with K1 at A$4.85

<ul>
<li>
<a href="https://www.smartkarma.com/entities/elmo-software-ltd" target="_blank" data-smartkarma-citation="entities:24342:1" rel="noopener">Elmo Software (ELO AU)</a> confirmed takeover interest from several parties, including Accel-KKR. Elmo previously disclosed on 14 June that it had discussions on a non-binding offer at A$6.10 per share.</li>
<li>The previous talks ended because the bidder (Accel-KKR) could not progress to a binding offer due to changing tech valuations. Elmo has materially underperformed ASX SaaS peers since 14 June.</li>
<li>The current conditions suggest a higher risk that the talks will fizzle out. Despite today’s 28% pop, the shares remain undemanding compared to peer multiples providing support to the shares. </li>
</ul>



Elmo Software (ELO AU) confirmed takeover interest from several parties, including Accel-KKR. Elmo previously disclosed on 14 June that it had discussions on a non-binding offer at A$6.10 per share.
The previous talks ended because the bidder (Accel-KKR) could not progress to a binding offer due to changing tech valuations. Elmo has materially underperformed ASX SaaS peers since 14 June.
The current conditions suggest a higher risk that the talks will fizzle out. Despite today’s 28% pop, the shares remain undemanding compared to peer multiples providing support to the shares. 


Elmo Software Confirms Takeover Interest from Various Parties

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

iShares Russell 2000 ETF / Technical Analysis

<ul>
<li>The market continues to send mixed signals - some neutral or healthy signals but some risk-off signals as well.</li>
<li>As long as the Russell 2000 index (IWM) is above $208, Russell Micro Cap index (IWC) is above $134-$135, and the S&amp;P 500 is above 4495, we cannot be bearish.</li>
<li>Treasury yields are not breaking down below 1.40%-1.45% support on the 10-year Treasury yield and 1.76% support on the 30-year Treasury yield.</li>
</ul>


The market continues to send mixed signals - some neutral or healthy signals but some risk-off signals as well.
As long as the Russell 2000 index (IWM) is above $208, Russell Micro Cap index (IWC) is above $134-$135, and the S&amp;P 500 is above 4495, we cannot be bearish.
Treasury yields are not breaking down below 1.40%-1.45% support on the 10-year Treasury yield and 1.76% support on the 30-year Treasury yield.


Continued Absence Of Breakdowns Is A Positive Sign; Many Bottoms-Up Stock Recommendations

Japan Specialist

Mark Chadwick

Equity Bottom-Up

<div><a href="https://www.smartkarma.com/entities/kaonavi-inc" target="_blank" data-smartkarma-citation="entities:29703:1" rel="noopener">Kaonavi Inc (4435 JP)</a>  operates a cloud-based Human Capital Management (HCM) service that helps companies manage their HR talent from Recruitment to Onboarding, Training to Communication, and Performance reviews to Promotion.  </div><div>The company released its 2Q20 results on Friday 13th, which may be unlucky for some, but not for Kaonavi which reported 30% sales growth.  </div><div>This note will look at the core trends in Q2. For a more in-depth view of the company, please refer to the previous note: <a href="https://www.smartkarma.com/insights/small-cap-growth-kaonavi-4435-turning-talent-into-teams" target="_blank" data-smartkarma-citation="insights:44415" rel="noopener">Small Cap Growth: Kaonavi (4435) – Turning Talent into Teams</a> </div>

Kaonavi Inc (4435 JP)  operates a cloud-based Human Capital Management (HCM) service that helps companies manage their HR talent from Recruitment to Onboarding, Training to Communication, and Performance reviews to Promotion.  The company released its 2Q20 results on Friday 13th, which may be unlucky for some, but not for Kaonavi which reported 30% sales growth.  This note will look at the core trends in Q2. For a more in-depth view of the company, please refer to the previous note: Small Cap Growth: Kaonavi (4435) – Turning Talent into Teams 

Small Cap Growth – Kaonavi (4435) - Talent Factory

United States

Paylocity Holding Corporation is a provider of cloud-based payroll and human capital management, or HCM, software solutions for medium-sized organizations.

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Paylocity Holding (PCTY US)

Elmo Software (ELO AU)’s Scheme Meeting on 30 January

This is a done deal. At the last close price and for the 23 February 2023 payment, the gross and annualised spread is 1.9% and 10.9%, respectively.

Arun George

Elmo Software Enters a SID with K1 at A$4.85

While not a knockout bid, it is attractive in the context of current conditions. Key shareholders will vote in favour. At the last close, the gross...

Arun George

Elmo Software Confirms Takeover Interest from Various Parties

The current conditions suggest a higher risk that the talks will fizzle out. Despite today’s 28% pop, the shares remain undemanding compared to...

Arun George

Continued Absence Of Breakdowns Is A Positive Sign; Many Bottoms-Up Stock Recommendations

As long as the Russell 2000 index (IWM) is above $208, the Russell Micro Caps index (IWC) is above $134-$135, and the S&P 500 is above 4495, we...

Vermilion Research

Small Cap Growth – Kaonavi (4435) - Talent Factory

Kaonavi operates a cloud-based Human Capital Management service that helps companies manage their HR talent. Talent management is growing rapidly...

Mark Chadwick

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