Spyrosoft is trading at extremely low multiples - Clear buy

Spyrosoft is trading at extremely low multiples. It should normally generate 50 million PLN in net profit this year (up from 40 million last year, but this year it will grow at a double-digit rate and ebit/ebitda multiples are higher), ending the year with almost 100 million PLN in net cash. Therefore, the current Enterprise Value multiple is less than 8 times earnings, all while growing at double digits!

To force a squeeze-out (which requires 95% of shares to accept the likely takeover/tender offer) upon the entry of a strategic investor, they are going to need to pay a massive premium in the takeover bid. Otherwise, many retail investors and funds will simply remain inside the company. Management controls 83%-85% (it is highly likely that they will roll over a portion of their equity in agreement with the strategic investor), but the rest is free float, and the offer must be genuinely good for them to accept it. At these prices, this stock is a bargain in the global market. It is extremely cheap at the bottom of the cycle. If the cycle improves over the next few years, we could see a multiple expansion combined with higher earnings, sending the stock price skyrocketing.

In other words, to cross that magical 95% legal threshold in Poland and force a squeeze-out, they must convince the vast majority of those independent funds and retail investors to accept the deal. If the premium is an insult considering the company's net cash and low EV/EBITDA multiples, the institutional funds and minority shareholders will just sit on their hands, blocking the complete privatization. Given they only need to capture a relatively small slice of the market cap to bridge the gap from 85% to 95%, they will likely go straight in with a massive premium to guarantee a fast, clean delisting