Why TPG’s $651M Bid for Infomedia Could Backfire; And Why the ASX was Embarrassed by the Deal

What does it say about a company when one of the world’s biggest private equity firms offers a 30 percent premium to take it off the public market?

That’s the question investors are asking after TPG announced a $651 million all-cash deal to acquire Infomedia Ltd (ASX:IFM), a quiet achiever in the automotive software space. If the deal is approved, it will mark the end of Infomedia’s 25-year journey on the ASX, and potentially the start of a new phase under private ownership.

Just a heads up, by TPG we are talking about the private equitor, not the telco that is also ASX listed even though some investors thought it to be so. And this perception meant that the dejection the bourse would have felt over another undervalued tech stock leaving was ironically the least of its worries.

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The Tech Backbone of Global Auto Aftersales

Infomedia isn’t a carmaker, but it powers the aftersales engine behind many of them. Its SaaS and DaaS platforms help manufacturers and dealerships manage everything from spare parts to service bookings, supporting more than 250,000 users across 195 countries.

So why now?

And why is TPG willing to pay up when others walked away?

Shareholders Face a Choice: Take the Cash or Hold Out?

CEO Jens Monsees, who took the helm in 2022, described the offer as a reward for years of internal transformation, a period focused on modernising Infomedia’s tech stack and lifting profit margins. That strategic repositioning aligns closely with what private equity firms look for in a target: a scalable, underappreciated asset with room for operational uplift and long-term value creation.

Earlier acquisition attempts in 2022 fell apart, with bidders spending months doing due diligence, only for Infomedia to get impatient and end talks. Many perceived the suitors found something in the ‘deal room’ that was adverse, conveniently forgetting that it was Infomedia who opted to end talks.

This time, analysts see TPG’s bid as more credible. Not only is it backed by all cash and no financing conditions, but it also comes at a time when macro conditions have become more volatile, adding weight to the certainty TPG brings.

E and P analyst Olivier Coulon noted that while the $1.72 per share price doesn’t represent a “full” valuation, shareholders are still likely to back the deal given the 30 percent premium and growing market uncertainty.

Following the announcement, Infomedia’s share price jumped 27 percent to $1.68, just shy of the offer price, suggesting the market sees the deal as likely to proceed with limited upside beyond it.

With a shareholder vote set for November and regulatory approvals pending, investors now face the question: Is this the best outcome for the long term, or is value being left on the table? In the context of an environment when many tech stocks have still failed to recover from the Tech Wreck, some investors may think this is the best outcome – even if they think value is being left on the table, they may be skeptical anything will change.

Not the TPG you think

This should’ve been just another takeover. There have been plenty of takeovers of non-resources companies that have been accepted by boards and investors because they thought there was no hope of realising further upside on the ASX. Recent case studies include Ainsworth and Johns Lyng.

But an error by the ASX led to further reputational damage. You see, there is a telco that shares the name TPG, and the ASX linked the telco to the deal by releasing the takeover announcement a second time under TPG’s code.

The error led investors to believe TPG was buying a company outside its sector leading to automatic trading algorithms kicking in and shares fell 5% before trading was halted. 5% may not sound like a lot, but that was ~$400m.

Yes, it was a human error, but the damage was done, adding fuel to the fire of regulatory scrutiny on the ASX for many reasons, including multiple operational failures (like Universal Store’s IPO) as well as how much of a farce the process of replacing the CHESS system has been.

Conclusion

There’ll be more to come where this came from. Infomedia will get bought out, we imagine. But who knows what action the telco TPG will take in retaliation (will it seek to leave the ASX and/or sue them?), or what action our regulators will take against the bourse?

Regulators have talked a lot about opening our market to competition from alternative stock market providers and by making changes that arguably wouldn’t have been considered a few years ago (like dual class shares) but little has been done. This could well be the ‘straw that breaks the camels back’.