Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

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<p>Back on 13th July this year, Australia-based ready-made meal delivery company <a href="https://www.smartkarma.com/entities/youfoodz-holdings-ltd" target="_blank" data-smartkarma-citation="entities:33759:1" rel="noopener">Youfoodz Holdings (YFZ AU)</a> entered into a Scheme Implementation Deed with multinational meal-kit delivery company <a href="https://www.smartkarma.com/entities/hellofresh-ag" target="_blank" data-smartkarma-citation="entities:26000:1" rel="noopener">HelloFresh AG (HFG GR)</a>. This was discussed in <a href="https://www.smartkarma.com/profiles/janaghan-jeyakumar-cfa" target="_blank" data-smartkarma-citation="accounts:3173" rel="noopener">Janaghan Jeyakumar, CFA</a>'s insight: <em><a href="https://skr.ma/FgACa" target="_blank" rel="noopener">Youfoodz (YFZ AU): HelloFresh's Lowball Takeover Offer Difficult to Block But Not UnBumbable</a></em>. </p>
<p><em><strong>The Offer Price of A$0.93/share was 38% lower than the IPO Price of A$1.50/share in December 2020</strong></em>. This was a friendly all-cash Deal. Or as Janaghan put it, a Rescue Offer. Shareholders <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02433229-3A577805?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">approved</a> the Offer at the Scheme Meeting on the 8 October. </p>
<p>This brings us to online shopping rewards platform <a href="https://www.smartkarma.com/entities/cashrewards-ltd" target="_blank" data-smartkarma-citation="entities:34205:1" rel="noopener">Cashrewards (CRW AU)</a>, which has <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02439381-2A1332732?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> it has entered into a Bid Implementation Deed with ANZ Bank’s innovation and investment arm 1835i Group.</p>
<p>The Offer price of A$1.135/share is a 19.5% premium to last close, but a 35% discount to its IPO price last December.</p>
<p>Nevertheless, the Offer has unanimous board support, and Andrew Clarke, Alium Capital &amp; M&amp;S Skyleisure, with 39.4%, will tender into the Offer, in the absence of a superior proposal. 1835i currently holds 19%.</p>
<p>This looks done. It may jog a competing Offer, but ANZ has an effective lock on the company.</p>
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Back on 13th July this year, Australia-based ready-made meal delivery company Youfoodz Holdings (YFZ AU) entered into a Scheme Implementation Deed with multinational meal-kit delivery company HelloFresh AG (HFG GR). This was discussed in Janaghan Jeyakumar, CFA's insight: Youfoodz (YFZ AU): HelloFresh's Lowball Takeover Offer Difficult to Block But Not UnBumbable. 
The Offer Price of A$0.93/share was 38% lower than the IPO Price of A$1.50/share in December 2020. This was a friendly all-cash Deal. Or as Janaghan put it, a Rescue Offer. Shareholders approved the Offer at the Scheme Meeting on the 8 October. 
This brings us to online shopping rewards platform Cashrewards (CRW AU), which has announced it has entered into a Bid Implementation Deed with ANZ Bank’s innovation and investment arm 1835i Group.
The Offer price of A$1.135/share is a 19.5% premium to last close, but a 35% discount to its IPO price last December.
Nevertheless, the Offer has unanimous board support, and Andrew Clarke, Alium Capital &amp; M&amp;S Skyleisure, with 39.4%, will tender into the Offer, in the absence of a superior proposal. 1835i currently holds 19%.
This looks done. It may jog a competing Offer, but ANZ has an effective lock on the company.


Cashrewards (CRW AU)'s Offer Is 34% Below Last December's IPO

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<h2>Cashrewards Limited</h2>
<h3>Building a cashback digital ecosystem</h3>
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<p>Cashrewards (ASX:CRW) is Australia’s leading cashback ecosystem, which rewards its members with cashback rewards in exchange for shopping within CRW’s network of more than 1,700 merchant partners. The cashback reward provided to the shopper is funded by the merchant, who in exchange obtains the ability to market to a large and fast-growing group of engaged shoppers. CRW earns revenues via sales commissions on transactions generated by their members, which averaged 5.9% in FY21. CRW is a digital-focused business with core assets represented by the company website and mobile phone app. The company listed on the ASX in December 2020 and raised $65 million at $1.73/share ($45 million of which was retained by the company to fund investment in development of the platform). The business was founded in 2014 by Andrew Clarke who is on the Board as a Non-Executive Director and retains a 23% stake in the company’s shares.</p>
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<p><strong>Business model</strong><br>Cashrewards utilises the data generated by its customers through transactions both online and in-store to work with merchant partners on the platform to improve customer engagement and drive KPIs such as foot traffic, conversion rates, repeat purchase rates, or direct promotions. With the deployment of funds raised at the IPO the business is investing to scale its membership base with an ambition to close in on the considerably higher cashback penetration levels seen in like markets overseas and in the technology underpinning the platform to drive increased shopping frequency.</p>
<p><strong>Underlying revenue growth of 54% to $20.1m in FY21</strong><br>The company has only recently listed on the ASX (December 2020) and is approaching its first full year as a listed company. In July 2021, the company secured a significant agreement with ANZ bank to launch a product called “Cashrewards Max” to ANZ’s 4.7 million consumer credit and debit card holders. Note that ANZ owns 19% of CRW shares which were acquired in the IPO. The company recently reported FY21 results with highlights including TTV of $351 million (+49% compared to FY20), active members up by 38% to 273k and underlying revenue (net of the COVID-19 impacted travel industry and giftcards) +54% to $20.1 million. One of the non-executive directors, Lauren Williams, announced her resignation in early August 2021, with the company continuing a search process for a replacement.</p>
<p><strong>Aiming for market leadership in Australian cashback</strong><br>While there are many customer loyalty programs in the Australian marketplace, CRW is aiming to become the “default cashback ecosystem”. Given the strong network effects between having a large membership base of high-value potential customers and the consequent strong incentives for merchant partners to join the platform (and thereby expand the potential spending of members within the ecosystem) obtaining scale quickly is crucial in what is likely to be a business model dominated by a single player in the Australian market. CRW has a strong brand and established presence in the Australian market and is backed by ANZ as a major shareholder. The company also appears well funded in the wake of the recent IPO and therefore looks to have strong prospects of delivering further growth.</p>
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Cashrewards Limited
Building a cashback digital ecosystem





Cashrewards (ASX:CRW) is Australia’s leading cashback ecosystem, which rewards its members with cashback rewards in exchange for shopping within CRW’s network of more than 1,700 merchant partners. The cashback reward provided to the shopper is funded by the merchant, who in exchange obtains the ability to market to a large and fast-growing group of engaged shoppers. CRW earns revenues via sales commissions on transactions generated by their members, which averaged 5.9% in FY21. CRW is a digital-focused business with core assets represented by the company website and mobile phone app. The company listed on the ASX in December 2020 and raised $65 million at $1.73/share ($45 million of which was retained by the company to fund investment in development of the platform). The business was founded in 2014 by Andrew Clarke who is on the Board as a Non-Executive Director and retains a 23% stake in the company’s shares.





Business model Cashrewards utilises the data generated by its customers through transactions both online and in-store to work with merchant partners on the platform to improve customer engagement and drive KPIs such as foot traffic, conversion rates, repeat purchase rates, or direct promotions. With the deployment of funds raised at the IPO the business is investing to scale its membership base with an ambition to close in on the considerably higher cashback penetration levels seen in like markets overseas and in the technology underpinning the platform to drive increased shopping frequency.
Underlying revenue growth of 54% to $20.1m in FY21 The company has only recently listed on the ASX (December 2020) and is approaching its first full year as a listed company. In July 2021, the company secured a significant agreement with ANZ bank to launch a product called “Cashrewards Max” to ANZ’s 4.7 million consumer credit and debit card holders. Note that ANZ owns 19% of CRW shares which were acquired in the IPO. The company recently reported FY21 results with highlights including TTV of $351 million (+49% compared to FY20), active members up by 38% to 273k and underlying revenue (net of the COVID-19 impacted travel industry and giftcards) +54% to $20.1 million. One of the non-executive directors, Lauren Williams, announced her resignation in early August 2021, with the company continuing a search process for a replacement.
Aiming for market leadership in Australian cashback While there are many customer loyalty programs in the Australian marketplace, CRW is aiming to become the “default cashback ecosystem”. Given the strong network effects between having a large membership base of high-value potential customers and the consequent strong incentives for merchant partners to join the platform (and thereby expand the potential spending of members within the ecosystem) obtaining scale quickly is crucial in what is likely to be a business model dominated by a single player in the Australian market. CRW has a strong brand and established presence in the Australian market and is backed by ANZ as a major shareholder. The company also appears well funded in the wake of the recent IPO and therefore looks to have strong prospects of delivering further growth.













Cashrewards Limited: Building a Cashback Digital Ecosystem

Australia

Cashrewards Limited is an Australian cashback reward program. The Company offers program which enables users to get a portion of their cash back when making a purchase online and in retail stores. Cashrewards serves customers in Australia.

Cashrewards (CRW AU)