ReadyTech's Rejected Takeover Bid Gets Backed Up by a Major Contract Win

Years of missed guidance culminated in a 53% premium takeover approach the board called too low, followed by a government contract that supports the case.

11 Sep 2026 · 3 min read

ReadyTech fell from around $2.30 to near $1.13 through early 2026 after repeatedly missing its own earnings guidance and eventually withdrawing FY27 targets altogether, only to attract a $2-a-share takeover approach from a Constellation Software subsidiary in June, an offer the board rejected as undervaluing the business just as a major new government contract arrived to back that view up.

A pattern of missed guidance wears out the market's patience

DMX Asset Management said ReadyTech reported revenue below expectations in February, reduced its FY26 guidance and withdrew FY27 guidance entirely, arguing a track record of consistently missing its own targets over several years was probably good reason to discontinue giving guidance altogether, calling it among the most unloved technology stocks on the market given a cost base too high for its revenue. Tamim Funds Management, founder-led and majority owned by private equity firm Pemba Capital, said it had taken a position at $2.25 the previous year believing the stock would either re-rate as the company won large contracts and delivered on guidance, or fall back into the crosshairs of a potential acquirer, an outcome that would ultimately prove prescient. Forager Funds noted the stock fell further after first-half revenue grew just 5.6 percent, with the local government division particularly slow and costs still rising.

A steep discount to a long-forgotten private equity bid

Seneca Financial Solutions named ReadyTech one of its top picks in January, noting the stock traded at a steep discount to the A$4.50-a-share private equity bid that collapsed in 2022, despite sticky government and education recurring revenue and what it called rule-of-40 economics. Seneca drew a parallel to Infomedia's earlier failed 2022 private equity approach, which later succeeded at a higher price, and viewed major holder Pemba Capital as motivated to eventually exit given the vintage of its fund.

ReadyTech trades at a steep discount to the A$4.50 private-equity bid that collapsed in 2022 despite sticky government and education recurring revenue and 'Rule of 40' economics.

— Seneca Financial Solutions, Article, January 2026

A takeover offer arrives, and the board says it's still too cheap

HD Capital Partners said ReadyTech received a non-binding offer of up to $2 a share, a 53 percent premium to the last traded price, from Total Specific Solutions, part of the Constellation Software Group, which the board rejected on the basis it materially undervalued the company. HD Capital said it had believed strongly the stock was significantly undervalued, and the approach made clear a large strategic acquirer agreed. DMX Asset Management said the stock rose 24 percent on the news, calling the offer opportunistic but suggesting a change of control with a credible new shareholder would be welcomed regardless. Investors Mutual Limited made a broader point about the dynamic, noting private capital and industry players are willing to take a longer-term view than public markets on stocks under pressure, and that eventually things simply become too cheap to ignore.

This compares to the current price of ~$1.60 and highlights the disconnect between today's price and the underlying value of the company.

— HD Capital Partners, Monthly Report, June 2026

A major contract win backs up the undervaluation case

Tamim Funds Management detailed a five-year Student Management System contract across the eleven-institute Victorian TAFE Network, serving more than 170,000 students annually, which it estimates could add $6 million to $8 million of annualised recurring revenue and $10 million to $15 million of professional services revenue over two to three years. Forager Funds said the win, in a market where ReadyTech already had long-standing customers, is a meaningful contract and a piece of good news after a difficult few years, while DMX Asset Management called it a significant endorsement of the business.

What fund managers say they are watching next is whether Total Specific Solutions returns with an improved offer or another suitor emerges, how quickly the Victorian TAFE contract's revenue contribution materialises, whether management can finally deliver on reset guidance after years of misses, and Pemba Capital's exit timeline given the vintage of its fund.