(News Bulletin 247) – The manufacturer of terminals for points of sale announced this Monday that it had entered into exclusive negotiations with Advantech, which will take over the entire stake of founder Patrick Cathala. Then, Advantech plans to launch a takeover bid at a price of 6.31 euros per share, with a view to subsequently delisting Aures.

In great financial distress, Aures indicated at the end of February that it was pursuing “advanced discussions relating to partnerships and, or, additional financing”. The situation is well on its way to improving for the manufacturer of point-of-sale terminals.

Aures as well as its founder and main shareholder Patrick Cathala indicated Monday morning that they had entered into “exclusive negotiations” with Advantech for a series of operations, ultimately aiming at a delisting of the manufacturer of terminals for points of sale.

Created in 1989 and listed on Euronext Paris since 1999, the French company is present in the United Kingdom, Germany, Australia and the United States, as well as in around sixty other countries through its network of partners, distributors and resellers. , is a world leader in complete hardware solutions for the “POS” (point of sale and service, retail, hotel and catering, etc.) and “KIOSK” (universe of interactive terminals and integration professions) sectors. ). It notably offers ordering terminals in restaurants (which are used by customers or servers) or scanners to read barcodes.

Advantech is not an unknown group for Aures. Specializing in intelligent systems linked to the Internet of Things (IoT) present in sectors such as embedded computing, transport or environmental monitoring, this Taiwanese group came forward in mid-October 2023 to provide a financial rescue in Aures. The latter had issued a convertible bond reserved for Advantech group, with a maturity of two years and for an amount of 3.2 million euros.

A proposed takeover bid at 6.31 euros per share

Regarding the operation announced today, it is planned in three parts. Initially, the manufacturer of terminals for points of sale intends to issue a convertible bond for the sole benefit of Avantech, in two tranches amounting to 2.5 million euros each. The conversion price is set at 4 euros per share, i.e. under the same conditions as those of the previous operation revealed in mid-October.

Advantech would acquire off-market a block of shares representing 1,430,381 shares held by Patrick Cathala at a price per share of 6.31 euros. Following the acquisition of this block of shares, the group would hold 35.8% of the capital of Aures post-operation.

The organization chart will be subject to modification after the planned transfer of control to Advantech. Patrick Cathala would thus be called to resign from his functions as chairman of the board of directors and general manager of d’Aures and would be replaced by a representative of the Taiwanese group.

However, Aures specifies that a service contract would be concluded with Patrick Cathala in order to ensure “a smooth transition” with the Advantech team.

Advantech would then submit a proposed public purchase offer (OPA) at 6.31 euros per share, on the outstanding securities that it would not yet hold following the block acquisition. This reflects a premium of 63% compared to the last price quoted by the group, at the close of Wednesday April 17, i.e. 3.87 euros. If Advantech manages, via this takeover bid, to hold more than 90% of the capital of Aures, the company will then be delisted.

The subscription of the first tranche of the bond issue and the completion of the acquisition of the block by Advantech should take place before the end of the second quarter of 2024, according to the indicative timetable provided by Aures.

The operation must however be approved by the general meeting of Aures, which should be held no later than June 15, “which should be a formality thanks to the double voting rights of Patrick Cathala”, advances TP ICAP Midcap in his note published this Monday morning.

An “expected” outcome

“This outcome was rather expected,” said Florent Thy-thine, head of equity research at TP ICAP Midcap. The premium of more than 60% compared to the last price before the suspension of the stock (+48% compared to the average price of the last 3 months)”, “will allow investors who recently entered the file to be satisfied”, continues the specialist.

Given the financial situation in which the group found itself, TP ICAP Midcap suggests that shareholders “contribute to the offer”, even if for the design office it is “difficult” to be “satisfied with ‘such an end’.

The financial intermediary recalls that it initiated coverage of this file in December 2014 at a valuation of 44 million euros. However, the current offer highlights a valuation of around 25 million euros, he notes. Which marks a value destruction of more than 40% in the meantime.

“In 10 years, the group has nevertheless shown its ability to differentiate itself in a difficult sector, reaching a valuation of more than 200 million euros at its highest,” says TP ICAP Midcap.

However, “the shift in software will not have been mastered by the group, explaining, in our opinion, in large part the current situation, aggravated by the pandemic and the difficult integration of RTG (an American company specializing in IT services for the collection terminals purchased in 2018, Editor’s note)”, adds the financial intermediary. It maintains its recommendation to “keep” with “the aim of making the offer when the finalization of the operation is official”, with a price target now set at 6.31 euros, to “align” on the Advantech offer.

On the Paris Stock Exchange, the Aures share is suspended at a last price of 3.87 euros on April 17, and has so far gained 56% since the start of the year. For example, the company climbed 14.1% on February 23, after the publication of its annual turnover.

The manufacturer of terminals for points of sale had certainly published declining revenues in 2023, but the group had revealed activity above expectations in the fourth quarter.

He reported almost stable turnover in the last quarter of 2023 and even slight growth (+1.4%) at constant exchange rates, “which has not happened since the third quarter of 2022”, appreciated Florent Thy-tine in a previous note commenting on the publication of Aures.

This publication constituted a “good surprise” for the specialist while the group “had accustomed (the market) to sharp declines in recent quarters”.

On the sidelines of this point of activity, the group gave some encouraging signs on the resumption of its activity, with “certain signs of renewed interest from customers”. Aures has an exclusive framework contract with Compagnie des Alpes for the supply of terminals for leisure park sales points over a period of 5 years, as well as a contract with a major catering player in England.