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Shares in Melbourned-based Whispir (ASX: WSP) have reached a higher pitch today after receiving a takeover bid from Soprano Design valuing the communication solutions technology provider at $62.88 million, which is 60 per cent above its last trading price but well below its initial public offering (IPO) valuation of $163 million in mid-2019.
From SMS messages to email, forms to landing pages and social media, Whispir's platform automates communications between organisations and people - an offering that generated a jolt in activity during the pandemic with messaging for vaccine roll-outs, pathology tests, e-prescriptions and more, but in FY23 revenue dropped by almost a quarter amidst a cost-cutting restructuring in pursuit of positive free cash flow.
Following a financial year when its losses deepened to $12 million, in its annual report Whispir claimed its 30 per cent staff cut in November 2022 alongside withdrawal of resources from the US helped deliver $20 million in annualised savings, reducing free cash outflows to just $1.3 million in the June quarter.
Amidst improving margins, Whispir also secured a $7.5 million debt facility with RiverFort Capital, and late last month announced a $3.25 million raise as well as the resignation of its founder Jeromy Wells from the role of CEO, who will remain in the position for four months before transitioning to executive director.
"It is now 23 years since I began to think seriously about how technology could drive more effective communication, and founded Whispir," he said at the time.
"I am immensely proud of the international company that Whispir has become, with employees in a number of countries serving some of the most-recognised companies around the world.
"The journey is not finished yet, but it is time for new leadership to drive Whispir’s growth in this constantly expanding market."
Today's announcement raises the possibility that new leadership could be determined by new ownership, in the form of Soprano, another Communications Platform as a Service (CPaaS) provider which already holds a 15 per cent stake in Whispir.
Based in Sydney, Soprano was founded in 1994 by Dr Richard Favero and serves large enterprises as well as government with around 3,500 customers utilising its technology. Since September the company has been headed up by CEO Mark Bayan, who had previously led ASX-listed artificial intelligence (AI) annotation service company Appen (ASX: APX).
In its bid, Soprano highlights its 48 cents per share (cps) cash offer represents a 92 per cent premium to the issue price of 25cps in Whispir's recently completed $3.25 million placement.
In response, Whispir advised shareholders to not take any action yet as the board still needs to evaluate and assess the terms and conditions of the offer.
At the time of publication WSP shares are trading at 48.5cps, which is slightly higher than Soprano's offer even though the suitor claims its bid is its 'best and final and will not be increased, in the absence of an alternative proposal or a competing proposal'.
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