Qantm Intellectual Property fields $254m takeover bid from Adamantem Capital

Qantm Intellectual Property (ASX: QIP) has received a non-binding indicative takeover offer from Australian-based private equity investor Adamantem Capital.

The company confirmed the news this morning in response to recent media speculation.

Under the terms of the proposed deal, Adamantem will acquire all of Qantm’s shares at a price of $1.187 each by way of a scheme of arrangement.

It would be an all-cash transaction with a scrip election of up to 50%.

The offer is believed to be worth around $254 million.

Adamantem’s bid represents a better deal than the takeover offer made last month by UK-based intellectual property firm Rouse International.

Qantm said it was yet to fully assess both proposals.

Qantm’s business

Qantm has three key business brands across patents, trademarks and litigation.

It owns Davies Collison Cave, one of the Asia-Pacific’s largest patent and trademark attorney firms, plus Sortify.tm and DCC, two of Australia’s top three agents for trademark applications.

Qantm debuted on the Australian Stock Exchange in 2016 with a $295m market capitalisation.

That value had dropped to $161m last month.

Positive financials

Takeover interest in Qantm comes after the company last month lodged its first set of positive financials since listing.

It reported $56.8m in revenue for the December half, while underlying earnings before interest, taxation, depreciation and amortisation increased by 25.7% to $17.3m.

Qantm’s net debt for the period fell to $21.7m.

Strong organic growth

Chief executive officer Craig Dower welcomed the financial results.

“We have seen strong organic growth in revenue and earnings across most of the group and our continued focus on improving financial disciplines has delivered greater margins,” he said.

“Our balance sheet and cash flow have improved, with a reduction in debt and an increase in our overall cash position, [while] our earnings per share is our strongest since listing and is reflected in a 4.9 cent dividend, which is up 75% against the 2.8c dividend in the same period last year.”