Question 1

What is the current scale of consolidation in the Australian software and tech sector?

Accepted Answer

M&A activity is intensifying, led by KKR’s $1.6bn successful takeover of MYOB. Further consolidation is evident in the fintech space, where Bravura has launched an acquisition bid for GBST at a 36.9% premium.

Question 2

How are major media players restructuring their portfolios this year?

Accepted Answer

Companies are aggressively divesting non-core assets to streamline operations, such as Nine Entertainment’s sale of its regional media business for $115m. Simultaneously, players like Seek are diversifying into global digital education through a combined $142m investment in FutureLearn and Coursera.

Question 3

Are digital retailers becoming a genuine threat to traditional utility providers?

Accepted Answer

Yes, e-commerce leaders are leveraging high growth rates, such as Kogan’s 73.7% year-on-year revenue increase, to disrupt adjacent markets. Kogan’s launch of an energy comparison tool marks a strategic entry into the utilities sector aimed at capturing market share from incumbents.

Question 4

What regulatory or legal hurdles are currently impacting the telecommunications market?

Accepted Answer

Governance and disclosure remain high-risk areas, evidenced by the class action served against Vocus regarding its FY17 earnings guidance. However, the regulatory environment remains open to foreign investment, as seen in the FIRB approval of Casa Systems' acquisition of NetComm Wireless.

Monthly Australian TMT Wrap: April 2019

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