How is Computershare (ASX:CPU) placed in 2021?

by Scarlett S. Stock Market Analyst

A technology-enabled administrator of financial assets, Computershare Limited (ASX:CPU) has a presence in 21 nations and has 12K employees and more than 25,000 clients.

CPU is amongst the leading companies within the S&P/ASX 200 Information Technology sector index and S&P/ASX All Technology index. Although the two tech indices have delivered negative YTD returns, Computershare has significantly outperformed the indices with a return of 8.33% in 2021.

Let’s walk through the crucial developments of CPU this year.

Developments in 2021

On 24 March 2021, Computershare announced signed a deal to purchase the assets of Wells Fargo Corporate Trust Services for US$750 million. Wells Fargo Corporate Trust Services is a prominent US-based provider of trust as well as agency services to government and corporate customers.

The Company highlighted that the acquisition would help yield attractive financial returns for stockholders. CPU highlighted that the funding of this acquisition would be through the combination of debt and equity. Thus announced the launch of AU$835 million underwritten pro-rata accelerated renounceable entitlement offer with retail rights trading.

The acquisition is a highly strategic, financially accretive transaction and would support CPU’s geographic expansion in the US and extension of its existing Canadian and US operations. Further, it would move CPU from number 8 to the leading four market position in the US.

ALSO READ: How Wells Fargo CTS Acquisition Will Boost Computershare's Business

Completion of Institutional component of Entitlement Offer

On 29 March 2021, the Company completed the institutional part of its underwritten 1 for 8.8 pro-rata accelerated renounceable entitlement offer and raised A$500 million at AU$13.55 per share. The Institutional Entitlement Offer was firmly backed by institutional shareholders with the participation of ~94% by qualified institutional stockholders.

Completion of retail component of the Entitlement Offer and retail shortfall bookbuild

On 22 April 2021, the CPU completed the Entitlement Offer's retail component and raised ~AU$187.6 million. On 23 April 2021, CPU finalised the retail shortfall bookbuild part of its underwritten 1 for 8.8 pro-rata accelerated renounceable entitlement offer and raised AU$335 million from the issue of ~24.7 million shares.

Stock Information

On 22 July 2021, CPU shares were trading at AU$16.250 (at 11:34 AM AEST), up 4.166% from their previous close. CPU has a market cap of AU$9.41 billion.