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A scheme implementation deed has revealed the potential for an alignment of PropTech Group with the multinational property technology giant.
PropTech Group has entered a scheme implementation deed (SID) with a wholly owned subsidiary of MRI Software, under which it is proposed that BidCo will acquire 100 per cent of the business via a scheme of arrangement.
Under the proposal, 100 per cent of the group’s shares will be obtained by MRI Software — a privately held real estate software solutions for commercial, residential, and social housing — at a cost of $0.60 per share, equating to an implied equity value of approximately $93.4 million on a fully diluted basis.
In the absence of a superior proposal, PropTech Group’s board has unanimously advised the company’s shareholders to vote in favour of the scheme. The board added that the Independent Expert concluded, and continues to conclude, that the scheme is in the best interest of the company’s shareholders.
PropTech Group product inclusions in the MRI acquisition include:
- VaultRE
- VaultEA
- EagleCRM
- Real Estate Investar
- Website Blue
- Designly
- RentFind Inspector
Should the scheme go ahead, PropTech shareholders would receive $0.60 cash per share, a value that is 131 per cent of the closing price on 28 October 2022 ($0.26), or 125 per cent of the group’s 30-day volume weighted average price of $0.267.
Each PropTech Group director confirmed their intention to vote any PropTech Group shares they hold or control in favour of the scheme — representing 19 per cent of the company’s issued capital.
Among the factors considered by the directors when recommending the scheme to shareholders was the significant premium being offered and the certainty of value — with the 100 per cent cash consideration providing PropTech shareholders with certainty of value and the opportunity to realise their investment in full for cash.
Speaking on the decision to enter the scheme, PropTech Group chairman Simon Baker said the company believes it is “in a strong position to continue to drive strong growth in 2023 and beyond by executing on [its] clear strategic plan that combines organic and inorganic initiatives”.
But, “the board believes that the proposal received from MRI represents a compelling opportunity for PropTech shareholders to realise a significant premium to the value of their PropTech shares via the certainty of cash consideration and in a time frame that would not otherwise be available”.
David Bowie, managing director and senior vice-president (Asia-Pacific region) at MRI Software, said the acquisition “brings immediate value to our real estate agency clients in the region and represents a significant investment in the future of the real estate sector.”
“In the same way fintech fuelled growth and efficiencies in banking and finance over the last decade, we believe PropTech will propel the next generation of real estate to ensure its long-term value and contribution to our national economies,” Mr Bowie said.
Mr Bowie explained the brand’s position that to “keep clients for life, we believe an open and connected technology ecosystem is a must. Marketing, sales, and property management need to be able to work together to deliver a ‘single view”.
Joe Hanna, PropTech Group’s chief executive officer and managing director, outlined that “bringing our respective innovations together in one ecosystem makes sense as agencies rise to the challenge of keeping clients for life”.
“I welcome our shareholders’ support to secure closure on the agreement in the coming months so we can collectively crack on with making a positive difference,” he said.
Subject to Australian Securities and Investments Commission (ASIC) registration and court approval, the Scheme Booklet, which will contain further details on the proposal, is expected to be dispatched to PropTech Group shareholders in December 2022.
It is anticipated that PropTech Group shareholders will have the opportunity in January 2023 to vote on the scheme, with the scheme expected to be implemented a month after, subject to the conditions of the scheme being satisfied.
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