A2B Australia operated a leading Australian transport and payments platform servicing the taxi, personal transport and related mobility markets. The company owned well-known brands including 13cabs, Cabcharge payments, taxi technology systems and dispatch networks. A2B generated revenue from network services, transaction processing, software solutions and fleet-related services across Australia.
Why did we invest?
Market Leader with Strong Brand Recognition: A2B owned established brands and infrastructure within the Australian taxi and mobility sector, particularly the 13cabs network and Cabcharge payments platform, providing scale advantages and strong industry positioning.
Recovery Opportunity Following Industry Disruption: The business had experienced significant disruption from rideshare competition and COVID-19 impacts. However, improving mobility demand, airport travel recovery and operational restructuring created a pathway for earnings recovery.
Attractive Valuation Relative to Strategic Assets: We believed the market undervalued A2B’s payments infrastructure, technology platform, dispatch capability and extensive taxi network relationships.
Operational Improvement & Cash Generation Potential: Management initiatives focused on simplifying operations, improving cost discipline and strengthening cash generation. As transport activity normalised, we believed earnings could recover materially.
Entry price
Began initially purchasing shares in June 2022 at $1.02 and continued to purchase over time with an average purchase price of $1.42.
Share price over the investment period. Source: S&P Capital IQ.
Why did we sell?
Acquisition by ComfortDelGro
In late 2023, A2B Australia received a takeover proposal from ComfortDelGro Corporation, a major global transport operator and existing participant in the Australian taxi market. The bid was $2.05 per share comprising $1.45 cash per share plus $0.60 per share fully franked special dividend.
The acquisition proposal provided shareholders with an opportunity to realise value at a meaningful premium to the prevailing share price, recognising the strategic value of A2B’s transport network, technology assets and payments platform.
Given the takeover premium and value crystallisation opportunity, we exited the position in line with our investment process, with the last sale completed in February 2024.
Investment outcome
Began initially purchasing shares in June 2022 at $1.02 and continued to purchase over time with an average purchase price of $1.42.
Received circa $0.05 in dividends per share over the investment period.
Sold at an average sale price of $1.45 + $0.60 special dividend with the last sale in February 2024 in the scheme.
Gain of 44.6% on our investment over the period, equating to a money weighted IRR of approximately 56.3%.
*Past performance is not indicative of future performance. This is general information only and should not be construed or relied upon as legal, financial or professional advice. Accordingly, the recipient should seek independent professional advice as to the risk, financial, taxation and other implications of investing. Microequities Asset Management Pty Ltd is a Corporate Authorised Representative (CAR 462438) of AFSL 287526.
