RPM Global follows well-worn path of global success. Who’s next?

As a kid during the 90s, I used to love watching cartoons – I still do if I am being honest.

One of my favourites of the time was a Warner Brothers cartoon called Pinky and the Brain.

The premise was simple.

Every episode would see the two main characters, both mice, launch an unsuccessful plan for world domination before retiring to brainstorm their next scheme which they hope will finally see them (or at least The Brain) take over the world.

The history of Australian-listed companies expanding internationally has often mimicked Pinky and the Brain – impressive plans, unimpressive result.

February’s announcement by Domino’s Pizza (ASX:DMP) that it will close more than 200 stores (mostly in Japan and Europe) was yet another example of this unfortunate trend.

There are, however, some that have bucked the trend.

While many would point to companies like Aristocrat (ASX:ALL), Cochlear (ASX:COH) and CSL (ASX:CSL) as the best examples, there are many more smaller companies who have found an interesting way to grow globally – by creating innovative solutions to small but important problems.

Mining the niche

Mining software company, RPM Global (ASX:RUL), is one such business that has turned targeted know-how into global success and it looks like it is about to pay off for shareholders.

On Monday, it was announced that global heavy machinery giant, Caterpillar (NYSE:CAT), is looking to acquire the business for $5.00 cash per share – a 32.6% premium to the previous close price.

Once focussed on consulting work, RPM Global pivoted to software and created a series of products that help optimise and manage the operation of mines. In a business where prices are set by market forces, managing costs is critical to profitability so RPM’s software quickly found popularity amongst the global mining giants.

Although this might have shocked some investors, others were prepared such as Alex Shevelev of Forager who said in July on Livewire that RPM Global was a company that he thinks could be appearing on the radar of dealmakers.

Assuming the (non-binding) proposal succeeds, which the RPM Global board of directors intends to recommend to shareholders, it would mark a lucrative result for shareholders with the takeover price representing an all-time high.

Small ponds, big takeovers

RPM Global is the latest example of an Australian company that has taken a small pond approach only to receive a takeover offer.

Altium, a company that created software to assist in the design of printed circuit boards, was acquired in 2024 by Japanese semiconductor company, Renesas Electronics for $68.50 per share after rebuffing an offer by American software giant Autodesk three years earlier at $38.50 per share.

Buy now, pay later pioneer, Afterpay, managed to turn its small niche in payments into a $126.21 per share takeover offer from US payments giant Square, now Block (ASX:XYZ).

ResApp, which created a smartphone application which would analyse and diagnose a person’s cough, gained approval in Australia and Europe. It would then receive a takeover offer by Pfizer (NYSE:PFE), one of the world’s largest biotechnology companies.

Stocks to watch

With many companies which have used the “big fish, small international pond” approach gobbled up by larger companies, who remains?

The list is quite long.

Some names that spring to mind are technology companies like Pro Medicus (ASX:PME), Catapult (ASX:CAT) and Alcidion (ASX:ALC).

There are also a few advanced engineering companies like Droneshield (ASX:DRO), PWR Holdings(ASX:PWH) and VEEM (ASX:VEE) that are currently in the middle of international expansion fuelled by innovative products that are critical but important parts of a larger industry.

Medtech, long a lucrative market for Australian companies, continues to see companies grab international market share such as Nanosonics (ASX:NAN) and ResMed (ASX:RMD) while many emerging companies look to follow.

Of course, it won’t be easy, nor will it be a smooth journey if they do pull it off – there is no easy way to global success – but so far, the signs are there that I think they could join the list of local Aussie businesses using small niches to global success.