Proximus to Launch Telesign IPO at an Enterprise Value of $1.3 Billion; Maintaining FVE

Narrow-moat Proximus has announced its intention to launch an IPO for Telesign, its division engaged in programmable communications like two-factor authentication text messages or payment reminders, among other things. The shares will be listed on the Nasdaq and the IPO will be done via a special-purpose acquisition company, or SPAC, merger with North Atlantic Acquisition Company, or NAAC, a shell company that was looking for a business combination. Management estimates enterprise value will be around USD 1.3 billion, representing a 3.3 times EV/revenue (2021) multiple, in line with that of Swedish peer Sinch, which trades at a 3 times multiple but lower than those of peers Twilio or Okta in the U.S., which trade at double-digit multiples explained by higher growth prospects. Proximus shares are almost up 4% at the time of the writing. We maintain our fair value estimate of EUR 20 per share.