Amaysim Aus Ltd Rose 6.2% on Takeover Agreement

Amaysim Aus Ltd [ASX:AYS] is a small online mobile provider trading on the ASX. While not a mainstream telco, the company climbed 6.27% this morning, to a high of $1.95 per share. The climb caused AYS’s price-to-earnings ratio to rise from 18.3-times to 19.5-times earnings.

Though this means the stock became more expensive, will future earnings justify its current price?

What happened to the Amaysim share price?

This morning, AYS announced a binding agreement to acquire 100% of Click Energy Group Holdings Pty. Click is an online energy retailer. They have a ‘business model and customer value proposition [which] is strongly aligned with amaysim’s,’ said CEO of AYS, Julian Ogrin.

AYS is planning to pay $120 million on a cash-free and debt-free basis. This will consist of $40 million in AYS shares and the remainder in borrowings.

AYS expects the acquisition to be finalised by June 2017.

What now for AYS shares?

In FY17, Click could generate as much as $215.2 million in revenues and earnings before interest and tax of $13.8 million. According to AYS, Click’s business model will help them to significantly scale their own business.

They aim to have 300,000 homes as part of their customer base, offering a range of services like NBN, mobile and energy. Each household is estimated to pay an average of $200 per month.

That’s $60 million in revenues each month and $720 million a year. It’s not guaranteed that AYS will achieve their goal. But it could be a stock to put on your watchlist for future investment.


Härje Ronngard,

Junior Analyst, Money Morning



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