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GFI Software S.A. (GFIS), a global collaboration, managed service provider, and IT infrastructure software firm with principal offices in Luxembourg, plans to raise $79.3 million in its upcoming IPO this week.

The firm will offer 6.1 million shares at an expected price range of $12-$14 per share this week. If the IPO can find the midpoint of that range at $13 per share, GFI will command a market value of $491 million.

GFIS filed on November 2, 2013.
Lead Underwriters: Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Jefferies LLC
Underwriters: BMO Capital Markets Corp, Needham & Company LLC, Oppenheimer and Co, Stifel Nicolaus & Company

Summary
GFIS is a global provider of collaboration, managed service provider, and IT infrastructure software that tailors its solutions for small and medium-sized businesses-firms with fewer than 1000 employees. The firm's solutions are designed to meet the challenges facing SMB's, such as increasingly complicated IT systems, heightened security threats and workforce mobility. As of September 30, 2013, the firm's customer base numbered over 300,000 spread across 180 countries.

GFIS offers numerous software solutions for SMB's, including TeamViewer, an easy-to-use online collaboration tool that provides secure remote control and access to most Internet-connected devices that have installed the software, and GFI MAX, a cloud-based platform for MSP's that provides them with a portfolio of managed service solutions.

Valuation
GFIS offers the following figures in its F-1 balance sheet for the nine months ending September 30, 2013:

Revenue: $118,470,000
Net Income: $7,875,000
Total Assets: $422,477,000
Total Liabilities: ($97,390,000)
Stockholders' Equity: $519,867,000

For calendar 2011 and 2012 and for the nine months ended September 30, 2013, GFIS posted billings of $163.9 million, $187.3 million, and $147.9 million, respectively. The firm posted net losses of $40.7 million and $51.9 million for calendar 2012 and 2011, respectively, and generated a net income of $7.9 million (after giving effect to a gain on sale of discontinued operations of $10.5 million) for the nine months ended September 30, 2013.

Business
GFIS faces different sets of competitors in its various product segments, many of which are better capitalized and have access to greater resources than GFIS. Its MSP software solutions must compete with solutions offered by Kaseya, LabTech Software, AVG Technologies (AVG), Solarwinds (SWI), and Continuum Managed Services Hosting, while other products compete with diverse firms including Citrix Systems (CTXS), LogMeIn (LOGM), Cisco Systems (CSC), Intel (INTC), Symantec (SYMC), Microsoft (MSFT), Qualys Inc (QLYS), and Proofpoint Inc (PFPT).

Management
CEO Walter Scott has been with GFIS and its predecessor since October 2008. Mr. Scott previously served as the CEO of Acronis, Inc., and as CEO of Imceda Software. Mr. Scott has also worked in various sales and marketing roles for Embarcadero Technologies, BMC Software and Banyan Systems. He holds a B.A. in Marketing and an M.B.A. from the University of Maine.

Conclusion
We're a buyer of this IPO in the $12 to $14 range.

There certainly is rising demand for the firm's solutions among SMB's, as evidenced by the firm's expanding customer base, which grew from 180,000 customers in 2008 to over 300,000 in 2013. Moreover, the firm seems to be quickly approaching profitability, though its most recent income figure is skewed by a sale of discontinued operations.

Source: GFI Software IPO Is A Go From Luxembourg