Tyro Payments Ltd (ASX: TYR) and Qoria Ltd (ASX: QOR) are two ASX small caps on my M&A watchlist…
It’s no secret that mergers and acquisitions (M&A) have been running hot on the ASX this year.
Just ask Owen, Luke, and Ben: they’ve been taking a well-earned victory lap after spotting RPMGlobal’s (ASX:RUL) takeover potential before the headlines.
From mining software firms to RV rental operators, the small end of the market has been a fertile hunting ground for bigger players with capital to spend. For investors, this raises an interesting question: which companies might be next?
Two names worth watching are Tyro Payments Ltd (ASX: TYR) and Qoria Ltd (ASX: QOR). Both businesses have scale, sticky customers, and unique positions in their respective markets. When you think like an acquirer, those are exactly the traits that stand out.
Tyro: Scale in payments, attractive to global players
Tyro operates Australia’s largest non-bank network of payment terminals, with more than 73,000 merchants across healthcare, hospitality, and retail. Payments is a scale game: once the terminals are in place, each additional transaction costs very little to process, so margins expand with growth.
Recent results showed gross profit 4.4% to $220.1 million and management reaffirming continued gross profit growth and profitability in FY26. That stability is valuable in a sector where many rivals struggle for consistent profitability.
Tyro has been on the radar before. Back in 2022, private equity firm Potentia and Westpac Banking Corp (ASX: WBC) made an approach valuing the company at $1.60 per share — more than a 26% premium to where the share price trades today. More recently, reports linked Stripe to a potential interest in Tyro. For a global payments group, Tyro would provide instant scale and a ready-made merchant base in Australia.
For “acquirer-minded” investors, the key is not to speculate on timing but to recognise the strategic value. Tyro has already built the rails. A larger player might see more potential in layering on extra services or plugging in online payments capabilities.
Qoria: A moat in child safety technology
Qoria is less of a household name, but it plays in a critical niche: digital safety for children in education settings. The company provides monitoring and filtering software to K–12 schools across the US, UK, and Australia, while also expanding into direct-to-parent solutions.
The numbers have been moving in the right direction. Annual recurring revenue (ARR) has climbed to $145 million, up 25% year on year, while operating earnings (EBITDA) surged 670% to $15.4 million. Importantly, Qoria is now both free cash flow positive and compliant with the “Rule of 40” (a rule of thumb measure balancing growth and profitability).
Despite that, the share prices sits at just over 5x ARR, compared with global peers on 7–12x. For acquirers, that’s a significant valuation gap. With the rise of cyber safety concerns and regulatory pressure on schools to protect students online, Qoria’s position looks increasingly strategic.
It’s easy to imagine a larger global software player, or even a consumer-focused tech giant, seeing value in plugging Qoria’s tools into their own ecosystems.
Thinking like a business buyer
When you view Tyro and Qoria through an acquirer’s lens, the appeal becomes clearer:
- Scale and stickiness: Tyro has merchants locked in, Qoria has long-term contracts with schools.
- Growth potential: Both businesses are positioned in sectors with secular tailwinds — digital payments and online safety.
- Valuation gaps: Each trades below what global comparables might suggest, leaving room for a premium.
- Strategic fit: Bigger players could unlock synergies, whether through cross-selling, global distribution, or technology integration.
Perspective
For Raskals, M&A should never be the only reason to buy a stock. The real test is whether the underlying business can grow and compound value on its own. However, as recent deals have shown, when you back companies with unique assets and resilient models, the market isn’t the only one paying attention. Sometimes, a buyer with deeper pockets steps in.
That’s why keeping an eye on potential takeover candidates like Tyro and Qoria can be useful. Not to speculate on quick wins, but to remind ourselves of a core investing principle: think like a business owner…and sometimes like an acquirer.
