Tesserent Limited (ASX: TNT) has provided an update with respect to its quarterly results. Highlights of the announcement include the following.
- Revenue for quarter – $1.43 million.
- Customer invoices – $1.44 million.
- Asta acquisition will expand TNT’s offerings to include cloud technologies, managed services and development of blockchain applications.
- Acquisition costs – 4 x FY18 EBITDA – expected to result in a purchase price of $3.8 million, to be met through a combination of shares and cash.
- Shareholder approval for acquisition – AGM in November (indicative timing).
- Signed MOU with Blockchain Global Ltd (BCG) to develop cyber security platform – first potential transaction for TNT in the blockchain sphere.
The transaction should be complete later this quarter, but already there are signs that the group (TNT/Asta) is operational, as highlighted by the MOU with BCG (which has invested US$200 million+ in more than 50 blockchain-enabled businesses to date).
Although, the MOU involves TNT providing security for managed services, its core competency, it’s unlikely that the undertaking would have eventuated without Asta’s involvement, given the latter’s experience in the blockchain industry. We anticipate this will be the first of many such transactions in what is a growing sector.
Once TNT concludes its purchase of Asta news flow should increase, given the expanded business offering and consolidation of financial results (for December at least). To view our analysis of the Asta transaction, click on the button above.
Valuation: we maintain our valuation for TNT at $0.26/share (currently $0.07), in the belief that, once the Asta takeover is finalised (in December) and the new combined revenue confirmed, the company’s share price will re-rate towards our valuation (for full details of that valuation, click on the link above).