The recent news that Oracle is buying Textura for $663 million, or $26 per share was a surprise, but not a huge one. Several alert readers (and smart investors) had recently prompted me to reexamine Textura when its stock recently hit a low of about $13 per share.
The Textura Rollercoaster
At one point, when Textura was much smaller, it was valued at over $1 billion. At that time, I suggested it was overvalued (see here). When I reviewed the stock recently, it was valued at only $350 million even though it was now a much bigger company. It looked undervalued. Apparently Oracle thought so as well! (Oracle will combine the business with Primavera a project management company it bought many years ago, presumably along with Skire, another company in the construction space that Oracle had previously purchased.)
Textura is a construction industry platform and part of a larger set of B2B platforms I characterize as collaborative project management providers (see here). For those of you investing types there are two public comparables for Textura:
- Aconex (Australia)
- RIB (Germany)
I’m not paid well enough to do a complete analysis of these companies (and their stock prices) relative to Textura, but I will provide a few thoughts based on a quick review.
Aconex is public in Australia, it is faster-growing than Textura and is more focused on the design phase of the construction process than Textura. (Textura’s flagship products are more focused on the submittals and payments end of the process.) Aconex is also less focused on commercial construction and more on EPC and Infrastructure-type projects. Aconex is similar in size, in terms of revenue, to Textura. Its stock has moved up nicely, so Aconex now sports a market cap of just over $1 billion.
While these two SaaS upstarts gather all of the news and mindshare, there’s an old behind-the-firewall player in Germany, RIB Software. RIB seems to play more in the Aconex end of the market, but in Germany and EMEA, more so than ANZ. In other words, the world has been wide enough to accommodate all three companies. (Hamilton reference intended.)
RIB grows a little slower than the other two companies, but it is:
- about the same size,
- sports a 25% EBITDA margin
- has a market cap of about $500 million
- has a growing cloud business and
- it even pays a nice dividend (1.77% yield)
It seems that in the B2B construction platform space, whether you are a growth investor or a value investor, there may be a play for you! And if you believe SAP might want to respond to Oracle you can decide if they want the pure SaaS revenue or the “home game” in Germany. Finally, you could just wait for private companies like e-builder or Procore, who play a little more in the mid-market, to go public! Time to go “construct” your portfolio!