Infomedia receives yet another takeover bid: More are likely

Infomedia (ASX: IFM) continued the gains it experienced late May, up 7.38% at the open, after this morning announcing a third takeover offer has been made.

The share price recently jumped 5% on the back of news that the software-as-a-service (SaaS) provider for the automotive industry had received a competing takeover proposal to the initial $1.70 per share offer from TA Associates and Viburnum.

In the wake of the recent second offer by US-based, global technology-focused investment firm, Battery Ventures, at $1.75 per share in cash, the company today announced a further ‘conditional non-binding indicative’ proposal from Solera to acquire 100% the midcap company for $1.70 per share payable in cash.

Solera is a portfolio company of US based Vista Equity Partners, a technology focussed investment firm.

What we know so far

Mid May Infomedia’s share price closed 28.9% higher on the news that a Boston-based TA Associates/Perth-based funds manager Viburnum consortium offered to acquire the company at $1.70 share, after becoming a new substantial shareholder with a 14.5% stake.

The consortium’s offer came as a welcome relief to the share price which had bounced from $1.79 early October 2021 to $1.19 11 May 2022.

The consortium’s bid valued Infomedia at 20.1 times the last 12 months’ cash earnings. For added context, the most comparable deal in the sector, Brookfield’s recent acquisition of CDK, was at 14.6 times.

All three deals are on the table

Battery Ventures expects to finance its takeover from committed capital within its existing investment funds, and with 375.76m Infomedia shares outstanding, that equate to around $657.6m.

Infomedia's management believes it is in the interests of shareholders to engage further with the TA Consortium, Battery and Solera in regard to their respective proposals, and has granted due diligence access to the three parties.

Infomedia does not intend to make any further announcements until a recommended offer is agreed and has advised the market there is no certainty that any of the indicative proposals will result in a transaction.

Is Infomedia taking these bids seriously?

The pace at which Infomedia appears to be advancing its due diligence on all three bids suggests management is fully aware that a bidding war will ensue before the best all-round deal finally surfaces.

A fourth offer may also surface from US private equity firm Genstar Capital-owned auto software business OEConnection, which has allegedly been circling the company for some time.

Infomedia share price over 12 months.