The S&P/ASX 200 Index (ASX:XJO) dropped 2% today on US election concerns. The Corporate Travel Management Ltd (ASX:CTD) share price rose 8%.
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The S&P/ASX 200 Index (ASX: XJO) fell by around 2% today to 5,832 points.
Here are some of the main highlights today:
It can be inaccurate and pointless to assign overall share market movements to specific events. The US election is getting closer and today was the first debate between Donald Trump and Joe Biden. It was a spicy affair, to say the least. Most media organisations covered the debate, including Australia’s ABC.
The ASX 200 drifted more than 1% lower over the course of the afternoon after the debate.
Corporate Travel Management Ltd (ASX: CTD)
The Corporate Travel Management share price went up more than 8% today.
Investors got their first chance to react to the company’s acquisition of Travel & Transport in the US.
As a reminder, Travel & Transport is a North American corporate travel business which had US$2.8 billion of total transaction value (TTV) in the 2019 calendar year.
The enterprise value of this acquisition is US$200.4 million on a cash-free, debt-free basis. The enterprise value implies a multiple of seven times the 2019 calendar year pro-forma earnings before interest, tax, depreciation and amortisation (EBITDA), which was before the impacts of COVID-19. The implied multiple reduces to 4.3 times including the estimated full run-rate synergies of US$18 million.
It’s expected to be approximately 10% earnings per share (EPS) accretive on a pro-forma 2019 calendar year basis excluding synergies, and 30% EPS accretive including synergies.
Corporate Travel is carrying out a fully underwritten entitlement offer to raise $375 million.
Today the ASX 200 company announced that it has raised approximately $262 million under the institutional entitlement offer at $13.85 per share. That was an approximate 90% take-up by eligible shareholders, excluding Corporate Travel’s founder.
Electro Optic Systems Hldg Ltd (ASX: EOS)
Defence, space and communications technology business Electro Optic Systems (EOS) announced today that it has completed contract negotiations with the Australian government for the purchase of 251 remote weapon systems and related material.
The contract is valued at over $94 million and, according to EOS, “will not only enhance Australian Army capability and secure EOS’ supplier base, but will boost Australian jobs and create opportunities for small businesses. The contract finalisation includes $28.5 million of cash flow to EOS in the fourth quarter of 2020 that will assist in securing the EOS Australia supply chain consisting of 146 SMEs and 1,100 employees. The 251 remote weapons systems will be integrated on to Bushmaster and Hawkei protected mobility vehicles. Forty RWS are scheduled for delivery in the fourth quarter of 2020, with the remainder to be delivered in 2021.”
The EOS share price jumped to $5.88 in early trading, but it settled down to be down by 0.5% to $5.50.
Jumbo Interactive Ltd (ASX: JIN)
Ex-ASX 200 lottery business Jumbo saw its share price jump to $13.50 in early trading in reaction to the Lotterywest deal. But over the course of the day it dropped around 7.5% to $12.50.
After the market had closed yesterday Jumbo revealed the terms of its agreement with Lotterywest.
Jumbo will provide a white label software platform to Lotterywest with Lotterywest branding. This will allow Jumbo WA online players (worth around $33 million of total transaction value (TTV) in FY20) to opt to continue playing online on a platform they are used to, with Lotterywest.
The agreement is for an initial 3-year term with options to extend for a further three years and then another four years.
Jumbo will receive a service fee for every customer transaction through the white label platform for the provision of the software platform and associated operation, technical and customer support and development services and costs.
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Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Electro Optic Systems Holdings Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Jumbo Interactive Limited. The Motley Fool Australia has recommended Electro Optic Systems Holdings Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.