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The Altium Limited (ASX: ALU) share price has jumped this week. After a market-pleasing FY22 result, could the S&P/ASX 200 Index (ASX: XJO) tech share be approached with another takeover attempt?
Some readers may remember that in the middle of last year, it received interest from Autodesk. On 7 June 2021, Altium told investors that it had received a formal, non-binding, indicative proposal of A$38.50 per share.
But, while Altium appreciated the interest expressed by Autodesk, it said the offer “significantly undervalued” Altium’s prospects and the company rejected the offer.
New takeover approach?
There hasn’t been any official news at all from Altium.
However, the Australian Financial Review reported on comments from Bell Potter analysts that the Altium result was “cracking”. They say that the achievements and progress of Altium 365 could lead to Autodesk returning with another takeover approach, partly because Autodesk can’t currently provide the range of functions that Altium’s service can:
Our view is Autodesk’s Fusion 360 platform is lacking a high-powered ECAD offering so we believe Autodesk would still be very interested in Altium and may come back with a revised offer.
However, the previously-rejected offer of $38.50 is only 5% higher than the current Altium share price of $36.63, so I think an offer would likely need to be materially bigger than the last one to even be considered by the Altium board.
FY22 result recap
One year on from rejecting that previous offer, the ASX 200 tech share has returned to strong growth, which may have helped the Altium share price.
In FY22, it reported “strong” revenue growth of 23% to US$228.8 million. Within that, Octopart revenue soared 85% to US$50 million.
An improvement in profit margins helped Altium’s earnings before interest, tax, depreciation and amortization (EBITDA) grow by 33% to $79.8 million and net profit after tax (NPAT) increased 57% to $55.5 million. Operating cash flow jumped 30% to $72.5 million and the full-year dividend increased 18%.
In FY23, Altium is expecting to grow its revenue by another 15% to 20% to between US$255 million to US$265 million.
Altium’s management is confident about the future
The Altium president Sergey Kostinsky said:
Our cloud platform Altium 365 remains well ahead of our competitors with adoption growing strongly. We now have 23% of Altium Designer subscribers who have fully adopted Altium 365 with 30% more in the process of adopting it. We are accelerating our transformative agenda for the global electronics industry where we aim to bring the business of engineering onto Altium 365 from design to supply chain and manufacturing.
Our business model transition from perpetual to term-based licenses is progressing well; 33% of new seats sold were term-based licenses. This, combined with the uptake of higher value seats that include pro and enterprise level capabilities, is driving up subscription revenue. This positive trend has accelerated our annual recurring revenue (ARR) run rate and supports our drive towards our aspirational goal of US$500 million.
Altium share price snapshot
Over the past six months, Altium shares have risen by more than 12%. But, the ASX 200 tech share is still down 18% in 2022 to date.