MacTel bid for Bulletproof opposed by microcap fund

Microequities Asset Management has upped its stake as it decries the MacTel offer.
Written by Chris Duckett, Contributor

A hurdle has appeared on the path of Macquarie Telecom as it seeks to acquire Bulletproof, with Microequities Asset Management (MAM) upping its stake as it opposes the sale.

On Thursday, Microequities moved from 5.28 percent to now control 6.5 percent of Bulletproof, increasing the difficulty for a successful sale as Macquarie Telecom's offer needs approval from 90 percent of Bulletproof shareholders to proceed.

Rather than accept the proposal, Microequities said the Bulletproof business is turning around, and cited the AU$1.8 million improvement in earnings for the first quarter of the 2018 financial year.

"Microequities considers Macquarie Telecom's bid to be highly opportunistic and unreasonable," Microequities chief investment officer Carlos Gil said. "It provides inadequate consideration for a business that generated circa AU$50 million of revenues in FY17 and is the leading Amazon Web Services consulting partner for the Australian and New Zealand markets.

"Bulletproof management's internal forecast is for an EBITDA result in FY18 of AU$5.5 million, meaning Macquarie's bid represents an extremely low 3.77x EBITDA multiple."

The Macquarie Telecom proposal is worth AU$18 million, with Bulletproof set to boost MacTel's public cloud offering.

The telco already holds a 16.11 percent stake in Bulletproof by way of a deal with an associated entity of Bulletproof CEO and co-founder Anthony Woodward, the Woodward Family Company.

Bulletproof, founded in 2000, listed on the ASX after performing a reverse takeover of Western Australian-based mining company Spencer Resources in early 2014.

Macquarie Telecom in August announced an AU$8 million jump in full-year earnings before interest, tax, depreciation, and amortisation to AU$40.3 million.

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