Shareholders back Accel-KKR offer for K2fly


Staff reporter

Shares in Australian-listed mining software firm K2fly nearly doubled in value this week after it announced a A$38 million (US$25 million) buyout proposal from Silicon Valley private equity firm, Accel-KKR.

The bid multiple was about 2.8-times K2fly’s latest 12 months trailing revenue of $13.7 million.

The company reported FY23 revenue of $12.8 million and annual recurring revenue of $7.5m. It indicated last year its serviceable obtainable market ARR in the mineral resources governance area was about $62 million.

In November 2023 K2fly appointed Argonaut PCF and Atrico to complete a strategic review, including evaluation of alternative capital structures. Atrico is joint financial advisor to Argonaut on the Accel-KKR transaction.

Argonaut said late last year K2fly was well positioned after M&A and software development to “address a more complicated regulatory and ESG reporting regime, which we expect will lead to increased demand for an enterprise-level commercial off the shelf [COTS] solution”.

“With little to no COTS competition and product validation by many of the world’s top miners, we expect K2F to demonstrate continued growth in ARR.”

Accel-KKR managing director Dean Jacobson said this week: “Highly complex and regulated sectors such as mining, utilities and [energy] are increasingly facing pressures to do right on behalf of their customers, employees and other stakeholders. K2fly’s robust governance, tracking and reporting can result in stronger compliance, higher operational efficiency, better stakeholder transparency and generally be a vital competitive advantage for companies that operate in these industries.”

ASX-listed K2fly was trading at 10c on June 20 and finished the week at 18c.

Significant shareholders who own 48.5% of K2fly have backed the Accel-KKR bid.

 

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