The Pushpay Holdings Ltd (ASX: PPH) share price will be on watch today after the company announced that a new cornerstone investor had come on board.
Who is the new Pushpay investor?
Pushpay explained that it understands that interests associated with Christopher & Banks V Limited, the investment vehicle associated with Peter Huljich and Christopher Huljich, entered into agreements on 22 March 2021 with affiliates managed by Sixth Street, a leading global investment outfit, the shareholder has sold 100% of their shares to Sixth Street.
Sixth Street is a global investor with of US$50 billion in assets under management and committed capital. It was founded in 2009 and has over 320 staff, including more than 145 investment professionals. The long-term orientated and highly flexible capital base allows it to invest thematically across sectors, geographies and asset classes. Some of the other investments it has made include Airbnb, AirTrunk, AvidXchange, Gainsight, Kyriba, MDLIVE, Paycor, PaySimple, Spotify and SumUp.
The digital donation business was pleased to welcome a new cornerstone investor – this transaction actually increases Sixth Street’s holding to approximately 17.8% of Pushpay according to the company.
Leadership comments
Pushpay Chairman Graham Shaw said: “We are delighted to welcome Sixth Street as a cornerstone investor in Pushpay. As a highly experienced technology and growth investor with a core thematic focus on the convergence of software and payments, Sixth Street’s global scale and partnership-orientated investing approach brings considerable strength to Pushpay’s shareholder register.”
What to make of this move and the Pushpay share price
I wouldn’t read too much on the sale side of things – the Huljich family have seemingly wanted to sell down the holding for some time.
For every seller there’s a buyer on the other side. Sixth Street seems like a really good investor to have on board and it’s a big vote of confidence.
The Pushpay share price has fallen 24% over the last five months despite the company upgrading its profit guidance for FY21 a few times.
In my opinion, Pushpay ticks all the boxes you could want when thinking about ASX growth shares – it’s linked to a strong growth theme (digital payments), it’s seeing rapidly rising profit margins, it has several growth avenues aside from its core base of larger US churches and its cashflow is strong.
As a potential long term investment, I think Pushpay could be a good idea at today’s pre-open share price of $1.66, which puts it at 22 times the estimated earnings for the 2023 financial year, on CommSec numbers.
