PE Firm Thoma Bravo To Buy Australian Mapping Company Nearmap For $730M

Thoma Bravo, the tech-focused private equity giant, has struck once again. Its latest acquisition target is Nearmap (ASX: NEA), a provider of aerial imagery and location data headquartered in Australia.

  • About a week ago, Nearmap confirmed that it received a non-binding acquisition offer from Thoma Bravo and opened its books to the firm for due diligence. Now, the company’s board has agreed to Thoma’s offer to take it private for A$1.06bn ($730mn).

 

  • The acquisition price represents an 83% premium to Nearmap’s market value before Thoma made an offer and a 67% premium to the company’s average share price over the past six months.

Thoma Bravo is one of the world’s biggest private equity firms focused on the tech industry, with over $114bn of assets under management. Lately, it has raised record sums from limited partners and gone coast-to-coast shopping for technology companies. Early this month, it agreed to buy Ping Identity, an American cybersecurity company, for $2.8bn. In June, it closed a $10bn buyout of Anaplan, a business planning software company.

  • Nearmap provides aerial imagery and location data covering Australia, the US, New Zealand, and Canada. It’s best known for MapBrowser, an app that lets users fetch high-resolution images of cities and regional areas and view detailed location information.

Customers of Nearmap include governmental agencies using aerial imagery and location data to guide urban planning, insurance companies identifying high-risk properties, and architects conducting aerial surveys. The company’s tools are available via recurring subscriptions, the type of steady revenue stream that private equity firms like Thoma Bravo often target in a company.

Recurring revenues tend to bring in stable profits, making them a favorite for private equity firms. It’s also easier to predict and drive growth with this business model compared to operating on one-off sales deals.

  • Nearmap was founded in 2006 by Stuart Nixon, an Australian tech entrepreneur and inventor of the ECW (Enhanced Compression Wavelet) image format for aerial photography. In 2008, Ipernica, a publicly-traded Australian tech company, acquired Nearmap and injected significant capital to fund its growth. Nearmap became Ipernica’s primary product which the company renamed itself after.

 

  • With an impending sale to Thoma Bravo, shareholders who stuck with Ipernica from the early days are set to receive substantial monetary gain. Among them include Ross Norgard, a lawyer and founding Chairman of Nearmap’s predecessor, Ipernica, who holds a 5.2% stake in the company, meaning he’ll receive A$55mn ($38mn) from the sale.

 

  • Nearmap’s current CEO, Rob Newman, also owns 2.1% of shares in the company, implying he’ll receive A$22mn ($15mn) from the acquisition.

If all goes as planned, the acquisition will close in November 2022.

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