The Pushpay Holdings Ltd (ASX: PPH) share price is jumping higher after the electronic donation business announced takeover interest.
Pushpay is an ASX tech share that specialises in providing technology for US churches to receive digital donations and also manage the various church administrative tasks.
Takeover interest
Pushpay has told the market that it has recently received “unsolicited, non-binding and conditional expressions of interest or approaches from third parties looking to acquire the company.”
The board of Pushpay has appointed Goldman Sachs to assist as financial advisor. Pushpay warned that there is no certainty that these expressions of interest or approaches will result in any transaction.
It didn’t say at what Pushpay share price the offer was.
Profit guidance
With this announcement, Pushpay reaffirmed the guidance provided on 15 March 2022. The company expects underlying EBITDAFI (EBITDA explained) to be between US$61.5 million and US$63.5 million.
Excluding the costs associated with the investment into the Catholic initiative, the company expects to achieve underlying EBITDAFI for the year to 31 March 2022 to be between US$63.5 million to US$65.5 million.
For readers that don’t know, over the next few years, Pushpay is looking to reach a market share of 25% of the Catholic ‘sector’ in the US. This will require investing for growth, so the ASX share is showing investors how much its core business is expected to grow and what the overall numbers are (including the investment).
What to make of this for the Pushpay share price
Clearly, it’s good news for Pushpay shares, but would a deal go through? It depends on the price.
The Pushpay share price has dropped a long way in recent months. In the past six months, it has declined 45% as the growth rate slowed and investors went cold on ASX growth shares.
However, Pushpay is a profitable business that produces good cashflow. Unless this is a big offer, I think it would be a steal for the buyer if it were to go ahead 30% or so higher than the price last week.
I believe that Pushpay has an exciting future, including the expansion into the Catholic area of the US. It’ll be interesting to see what happens next.
