Raisebook

Cloud based Platform Serving Financial Services Sector | Over $100BN Assets with Global Clientele
ARMnet Limited
ARMnet Limited
ASX:AR1
  • Financial institutions globally utilise multiple systems across a wide range of functions, and as most of these systems can’t or often won’t talk to each other, this creates delays, costs and errors.
  • The ARMnet Platform helps complex organisations integrate, manage and move data to the cloud and digitally transforms their business.
  • The ARMnet Platform is an innovative cloud-based integration and processing software platform as a service – known in the industry as an “iPaaS” servicing the financial services sector worldwide.
  • ARMnet is the first iPaaS company in Australia seeking to list on the ASX.
  • The ARMnet Platform has enjoyed the security of multi-year contracts, and strong growing revenues, with a total growth rate of 119% over the last 3 years and at a rate of 97% over a 5 year period.
  • ARMnet is a platform of $100 billion in assets with a global clientele.
  • High client retention rates and scalable revenue model through delivery of core products through a cloud based iPaaS.
  • Highly experienced Board and management with decades of technology and financial services experience.
  • Indicative market cap on completion of the offer assuming minimum subscription of $25.99M.
  • Enterprise Value of $16.9M, EV/Sales for FY19 of 3.4x.
  • 43.3% Free Float assuming min. subscription.
Raise Amount
$8,500,000
Offer Price
$0.2000
Closes
Feb 12, 2020

ARMnet Limited is an Australian company incorporated for the purposes of purchasing 100% of Axcess Consulting Group Pty Ltd.

The Axcess Consulting Group’s core business is the ARMnet Platform.

Axcess Consulting is a well established business with more than 40 clients in North America, Australia, Asia and the United Kingdom.

It is a trusted provider with over $100 billion of client assets being serviced by the ARMnet Platform.

The ARMnet Platform has enjoyed the security of multi-year contracts, has a high customer retention rate and strong growing revenues with a total growth rate of 119% over the last 3 years and at a rate of 97% over a 5 year period.

The ARMnet Platform is an innovative cloud-based integration and processing software platform as a service – known in the industry as an “iPaaS” servicing the financial services sector worldwide.

The ARMnet Platform is used by large corporate clients in the insurance, non-bank mortgage lending and funds management sectors.

ARMnet is the first iPaaS company in Australia seeking to list on the ASX.

What problems does ARMnet Platform solve?

Financial institutions globally utilise multiple systems across a wide range of functions, and as most of these systems can’t or often won’t talk to each other, this creates delays, costs and errors.

Simply, the ARMnet Platform helps complex organisations integrate, manage and move data to the cloud and digitally transforms their business.

The ARMnet Platform dramatically reduces a client’s costs and saves time through its ability to translate, integrate and automate data ingested from the client’s various software systems (such as finance, sales and marketing and customer support software applications).

This allows multiple systems and processes to work together in a unified way for its clients’ data and information use.

The ARMnet Platform comprises a customer relationship management (“CRM module”) for financial product management including an origination portal for assets, software interchange programs and workflow engines that are built on an industry standard Microsoft .NET framework.

The platform is cloud based, which means that it is accessible via smart phones, tablets or email from anywhere at any time.

The ARMnet Platform combines software applications, data and media channels in an open architecture platform that provides an integrated solution for each phase of a financial services business from marketing, sales, user interaction, asset processing and financial reporting throughout to back office management.

The design of the ARMnet Platform provides flexible product modules and simple configuration.

This provides clients with the option to use the ARMnet Platform as an “out of the box” software product or as a fully configurable and customizable software product to suit specific business and product needs

The Offer

ARMnet Limited (ACN 619 705 207) is issuing 42,500,000 New Shares at an Offer Price of $0.20 each to raise $8.5 million with up to $2.5 million of oversubscriptions and the admission to the Official List of the ASX.

The offer of the securities are made in, or accompanied by, a copy of the Disclosure Document which can be obtained by clicking on the "ACCESS DISCLOSURE DOCUMENT" button on this page.

Anyone who wants to acquire the securities will need to complete the application form that will be in or will accompany the Disclosure Document.

Before making an investment decision, potential investors should read the Disclosure Documents entirely, and seek professional financial advice.

Investors should be aware that there are risks associated with an investment in this Company.

No assurance can be given that the Company will achieve commercial viability through development of its Platform.

A complete set of risks associated with an investment in the Company is included in Section 8 of the Disclosure Document.

Key Offer Statistics

Min. Subscription Max. subscription
Offer Price $0.20 $0.20
Total cash proceeds from the Offer $8,500,000 $11,000,000
Number of new shares to be issued under the Offer 42,500,000 55,000,000
No. shares held by existing shareholders 32,496,912 32,496,912
No. Options on issue at the date of the Prospectus 5,890,397 5,890,397
No. Performance Options on issue as at the date of the Prospectus 13,188,235 13,188,235
No. Alignment Options issued after the date of the Prospectus 5,963,022 6,493,022
No. Shares to be issued under and at the Completion of the SPAs 55,000,000 55,000,000
Total No. Shares on issue at the Completion of the Offers and the SPAs 129,996,912 142,496,912
Indicative market cap at completion of the offer and the SPAs $25,999,382 $28,499,382

Note: Please refer to the Disclosure Document for further details on the capital structure.

Escrow Arrangements

A number of Shareholders holding 73,487,724 Shares on Completion of the Offer will be under escrow arrangements for up to 24 months from the Listing Date. These persons include Related Parties, Promoters and other persons that the ASX requires to be restricted from selling their Shares.

The Axcess Consulting Shareholders will also be under escrow for 100% of their Vendor Shares for 24 months from the Listing Date.

The total escrowed shares represent 51.57% of the Company’s issued capital at the Listing (if the Maximum Subscription is reached). Please refer to Section 9.6 of the Disclosure Document for further details.

Historical pro forma historical consolidated income statements

Pro Forma historical consolidated income statements:

FY15 FY16 FY17 FY18 FY19
Revenue $2.54M $3.02M $2.25M $3.22M $4.92M
EBITDA $0.75M $0.51M ($0.33M) $0.13M $0.611
NPBT $0.58M $0.23M ($0.70M) ($0.21M) $0.31M
Tax - - - - -
NPAT $0.58M $0.23M ($0.70M) ($0.21M) $0.32M

Pro Forma Balance Sheet:

Min. Raise ($) Max. Raise ($)
Current assets $5.49M $7.84M
Non-current assets $0.21M $0.21M
Total assets $5.71M $8.05M
Current liabilities $1.97M $1.97M
Total liabilities $0.27M $0.27M
Net assets $3.46M $5.81M

For further details on the company's financial statements, please refer to the Disclosure Document.

Use of Funds
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As one of the purposes, the proceeds raised in connection with this offer will be used to execute a clear global growth strategy.

This will include the opening of dedicated sales offices in the United Kingdom and North

America and expanding sales and business analysts in Australia and increasing the expenditure on marketing.

In addition, some proceeds will be used to acquire Axcess Consulting under the SPAs (as outlined in Section 9.4.1), to retain quality personnel, to provide sufficient working capital

and to cover all costs for the Listing. Please refer to Section 2.3 of the Disclosure Document for further details on the use of proceeds.

Indicative Timetable

Event Date and Time
Broker Firm Offer Close 12 Feb 2020
Closing Date 19 Feb 2020
Issue of New Shares 21 Feb 2020
Expected Dispatch of Holding Statements 24 Feb 2020
Shares expected to begin trading on ASX 26 Feb 2020
This deal closed on February 12, 2020