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Research: TMT
BridgeComm, Allied Minds’ third largest holding in which it holds a 63% fully diluted stake (81% pre-dilution), has announced a high-speed optical communications partnership with Nokia. The partnership will leverage BridgeComm’s expertise in free-space optical technology and Nokia’s portfolio of network equipment and services backed by Nokia Bell Labs, the industrial research arm of Nokia, to facilitate faster deployment of 5G networks. BridgeComm is held by Allied Minds at a fully diluted book value of 7.7p per share (10.0p undiluted), based on an enterprise value of US$38m from BridgeComm’s last funding round in September 2018. With portfolio company valuations based on significantly historic last funding rounds, Allied Minds’ shares trade at a c 60% discount to our unchanged estimated fully diluted NAV of 77.9p (90.3p undiluted; both updated for FX). Allied Minds’ interim results are due on 15 October 2020.
Written by
Allied Minds |
BridgeComm’s 5G partnership with Nokia |
Portfolio update |
Investment companies |
28 September 2020 |
Share price performance
Business description
Analysts
Allied Minds is a research client of Edison Investment Research Limited |
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BridgeComm, Allied Minds’ third largest holding in which it holds a 63% fully diluted stake (81% pre-dilution), has announced a high-speed optical communications partnership with Nokia. The partnership will leverage BridgeComm's expertise in free-space optical technology and Nokia's portfolio of network equipment and services backed by Nokia Bell Labs, the industrial research arm of Nokia, to facilitate faster deployment of 5G networks. BridgeComm is held by Allied Minds at a fully diluted book value of 7.7p per share (10.0p undiluted), based on an enterprise value of US$38m from BridgeComm’s last funding round in September 2018. With portfolio company valuations based on significantly historic last funding rounds, Allied Minds’ shares trade at a c 60% discount to our unchanged estimated fully diluted NAV of 77.9p (90.3p undiluted; both updated for FX). Allied Minds’ interim results are due on 15 October 2020.
Period |
Portfolio fair value (US$m) |
Parent-level net cash (US$m) |
NAV |
NAV/share |
P/NAV |
Jun-18 |
350.1 |
66.0 |
416.1 |
132.4 |
0.26 |
Dec-18 |
226.7 |
50.6 |
277.3 |
88.8 |
0.38 |
Jun-19* |
266.1 |
31.3 |
297.3 |
100.2 |
0.34 |
Dec-19* |
209.0 |
31.9 |
240.8 |
77.9 |
0.43 |
Note: NAV is calculated as fair value plus net cash at the parent level and is based on our estimate of fair value as this is no longer disclosed by the company. *H119 and FY19 net cash and NAV are adjusted for post period-end investments; NAV/share converted from $ to £ at prevailing FX rate
BridgeComm offers a global network of ground stations designed to support complementary fixed and mobile terminals, providing fast, secure, enterprise-grade broadband services. Together with Nokia’s high-speed optical equipment and services, the partnership is looking to support the delivery of 100+ Gbps throughput without the need to lay fibre. The partnership offers the potential for a variety of applications for commercial and government customers, such as enabling last mile connectivity in 5G networks and high capacity encrypted free-space optics.
BridgeComm provides a primary downlink channel connecting satellites and high-altitude unmanned vehicles to the ground, with a solution able to accommodate accelerating demand for accurate and frequent data collection from low-earth orbit satellites. End-user markets being targeted by BridgeComm include space exploration, terrestrial networks for 5G connectivity and applications, and airborne lasercomm for applications including intelligence, surveillance, reconnaissance, in-flight entertainment and backhaul.
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