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Gofore Plc (‘Gofore’ or ‘Company’) announces today that it is planning an initial public offering (‘IPO’) and a listing of its shares on the First North Finland market operated by Nasdaq Helsinki Ltd (‘Listing’).
Gofore, operating since 2002, is a digital services company that has grown strongly and is seeking further growth. The Company offers modern services that help operators in the private and public sectors to face digital change. The Company’s services cover the entire value chain – from management consulting to service design and implementation as well as cloud services. Gofore’s mission is to change the world for the better through digitalisation and by renewing ways of working.
Gofore currently employs over 350 people in Helsinki, Jyväskylä, Tampere, Swansea and Munich. Gofore was chosen as the best workplace in Finland and the second-best workplace in Europe in the Great Place to Work 2017 survey.
The objective of the contemplated IPO is to promote Gofore’s growth and the expansion of its operations in accordance with the Company’s strategy. The Listing is also aimed at enabling the use of shares as means of payment in potential corporate acquisitions and for rewarding Company employees and key personnel. The contemplated Listing is also expected to improve awareness of the Company among customers and its attractiveness as an employer. The contemplated IPO is expected to consist of both a primary offering, where the Company issues new shares, and a secondary offering, where certain shareholders of the Company sell their existing shares. In the IPO, the objective would be to raise approximately EUR 10 million of new equity before IPO related fees and expenses. The equity raised may be used in corporate transactions, for promoting organic growth of the Company and for general corporate purposes.
Two domestic institutional investors, Ilmarinen Mutual Pension Insurance Company (‘Ilmarinen’) and Varma Mutual Pension Insurance Company (‘Varma’), have committed to becoming Cornerstone Investors (“Cornerstone Investors”) in the contemplated IPO and have given their subscription commitments in regard to the IPO.
The Cornerstone Investors have committed to subscribing for shares at the subscription price of the institutional offering in the possible IPO, subject to certain conditions being fulfilled, including that the maximum valuation of all of the Company’s outstanding shares (before any proceeds from the share issue), based on the subscription price of the institutional offering, does not exceed EUR 78.4 million. The respective commitments of the Cornerstone Investors are proportional shares of the outstanding shares in the Company following completion of the possible IPO as follows: (i) Ilmarinen: up to 8 % shareholding after the IPO, and (ii) Varma: up to 4.9 % shareholding after the IPO. The Company is committed to allocating to Ilmarinen a minimum of 6.5 % and Varma a minimum of 4.0 % of the total number of shares in the Company following the IPO.
Gofore’s CEO Timur Kärki:
“Expert services related to digitalisation, which Gofore also provides, are in great demand in the modern world. We have succeeded in renewing ourselves year after year in a way that has allowed our range of services to meet the needs of both the public and private sector.
Gofore is actively involved in this change in a wide range of sectors, from comprehensive Government digitalisation projects to the development of new services for the financial sector. At the same time, we have created a workplace for over 350 professionals, and are aiming to increase our number of employees even further. This year Gofore was chosen as the best place to work in Finland and the second-best in Europe.
All this has resulted in financial success as well. We have been growing profitably every year for over ten years now. It has been a staggering ride, and I believe that we can keep up this pace in the future as well. In the previous financial period, we increased our net sales by 49.9 %. It currently seems like our reported net sales will grow by over 75 % in this financial period and still rather profitably. All in all, we have rapidly advanced to our sector’s bigger leagues.
We are considering listing on the First North market because we believe this would strengthen our growth and allow us to serve our clients even better.”
Gofore’s strengths create competitive advantage
We consider our main strengths to be:
- Strong expertise and competence
- A unique corporate culture, that allows us to set ambitious targets
- A flat organisation and an innovative management model
- The goal of minimisation of risks through business predictability
- Continuous development
- Wide range of operating sectors and technologies
Financial targets and dividend policy
Gofore is pursuing net sales growth exceeding the growth of the target market, estimated to be 15–25 % annually in the next few years, and operating profit before amortisation of goodwill (EBITA) margin of 15 %.
In evaluating financial targets, the Board of Directors of the Company has based its evaluation on the business conditions of Gofore Group formed after the Leadin acquisition. Thus, the comparability of financial targets versus full-year reported and actualized financial results for the financial year 2017 is materially affected by the mid-financial-year corporate acquisition (May 2017). The financial information of Leadin and Gofore have only been consolidated as of 1 June 2017 and therefore, the full-year reported financial information of the Gofore group will not contain Leadin financial information between January-May 2017.
Gofore aims to distribute at least 40 % of its net profit as dividends annually. However, the distribution and amount of dividends is affected by at least the following factors: the Company’s financial results and standing, future growth investments, cash flow from operations, the amount of net debt, the need for debt servicing and other factors considered relevant by the Board of Directors.
Forecast for 2017
The Company’s management estimates that in the financial year 2017 the Company’s net sales will grow to EUR 32.5–34.5 million (reported), and that the Company’s operating profit before amortisation of goodwill (EBITA) will be EUR 5.2–6.2 million (reported).
Gofore’s key figures
In spring 2017, Gofore acquired the Leadin Group. The merger serves to further strengthen Gofore’s international business operations and service design expertise. Leadin has been incorporated into Gofore’s reported financial figures as of 1 June 2017.
During the nine-month period ending on 30 September 2017, the Gofore Group’s net sales increased by 76.0 % to a total of EUR 22.7 million. Pro forma net sales that take into account the acquisition of Leadin, increased to a total of EUR 26.1 million during the nine-month period ending on 30 September 2017. Operating profit before amortisation of goodwill (EBITA) during the nine-month period ending on 30 September 2017 was EUR 4.0 million, corresponding to 17.7 % of net sales. Pro forma operating profit before amortisation of goodwill (EBITA) was EUR 4.8 million, or 18.4 % of pro forma net sales. During the financial period, 63 % of the Group’s pro forma net sales came from public sector customers and 37 % from private sector customers. During the first nine months of 2017, 87 % of the Group’s pro forma net sales came from Finland and 13 % came from the Group’s operations abroad.