INVL Technology - NASDAQ OMX Vilnius listed ICT investment company - 2015 06 09

www.invltechnology.com | [email protected]

INVL Technology2015 06 09


SHORT VIDEO PRESENTATION

Please see the video: https://youtu.be/yiHPn1TOMlw

https://youtu.be/yiHPn1TOMlw


Combined competences

Joint venture of proven track

record IT industry managers

and leading Baltic private

equity group Invalda INVL

INVL Technology

ICT investment company

listed on OMX Nasdaq Baltic

Portfolio/cluster approach

Operates as a cluster of B2B

and B2G oriented IT

businesses with a private

equity-like investment

approach


Platform for growth

Raising of 20+m EUR capital

facility for additional

acquisitions and portfolio

companies development in

emerging & frontier markets

Key focus areas

Business climate improvement

& e-Governance, IT

infrastructure, Cyber Security

and IT intensive industries’

solutions providers

Global executional presence

Implementation of high-

impact development

projects in 50+ countries for

multinational donor agencies

(WB/UN/Norwegian

development agencies/etc.)


CORPORATE STRUCTURE

60%Invalda INVL anchor

shareholders

6%Free float

34%IT managers

INVL Technology (Nasdaq Baltic listed)

BAIP, UAB Vilnius Lithuania

NRD CS, UAB Vilnius Lithuania

Add-on investments

ACENA, UAB Vilnius Lithuania

Add-on investments

Add-on investments

NRD AS Oslo, Norway

Add-on investments

NRD, UABVilnius Lithuania

NRD EA Ltd,Dar es Salaam,

Tanzania

InfobankUganda Ltd,

Kampala Uganda

ETRONIKA, UABVilnius Lithuania

80% acquisition in progress

76.5%

70%

30%

Business climate improvement & E-governance

ITinfrastructure

Cyber security

IT intensive industries’ solutions


TEAM

Leading PE manager in Lithuania with operations since 1991

Listed on Nasdaq Vilnius SE since 1995

mEUR 350+ AuM *

18 deals exited valued 300+ mEUR; weighted average

investment multiple 6

Industries – pharmaceuticals, financials, IT, road construction,

real estate and etc.

Co-investment with leading regional and global PE teams (CVC Capital

Partners, Amber Trust, KJK Capital, Firebird Management and etc.)

15+ executives with at least 15 years IT industry experience

Participation in company ownership

Extensive and global network of ICT business contacts

Key competences – cyber security consultations and solutions, complex IT infrastructure

projects

Invalda INVLshareholders

IT managers

INVL Technology

Combined competences in developing ICT since 2007

Equity – EUR 11.9 million

Equity investment multiple –5,5 *

*as of the end of Q1 2015, management estimate


KEY EXECUTIVES

VYTAUTAS

PLUNKSNIS

Fund Manager at

Invalda INVL, AB

Member of the Board

of INVL Technology

12+ years’ experience

in capital markets and

M&A

DARIUS ŠULNIS

CEO, managing partner

Invalda INVL

CEO, INVL Asset

Management

20+ exits

20+ years of M&A, PE

experience

KAZIMIERAS

TONKŪNAS

CEO, co-founder &

managing partner of

INVL Technology

20+ years’ executive

experience in ICT sector

M&A, spin-offs, frontier

markets

VIDA

JUOZAPAVIČIENĖ

Head of HR & General

Affairs at INVL Asset

Management, co-

founder of INVL

Technology


in ICT sector M&A, HR,

Marketing and

Operations

NERIJUS

DROBAVIČIUS

Member of the Board of

INVL Technology


in M&A, financial

analysis and setting up

management controls

7 yearsInvolvement with INVL Technology






CLUSTER FOCUS AREAS

BUSINESS CLIMATE IMPROVEMENT & E-GOVERNANCE

IT INFRA-STRUCTURE

CYBER SECURITY

IT INTENSIVE INDUSTRIES’ SOLUTIONS


BUSINESS CLIMATE IMPROVEMENT & E-GOVERNANCE

BUILDING SPECIALISED E-GOVERNANCE SOLUTIONS PROVIDER WITH A FOOTPRINT IN SELECTED MARKETS

INDUSTRIES & CLIENTS: – Registries, Mortgage Offices, Public Procurement

Agencies, e-Government, Licensing Offices, Central Banks, Tax inspectorates

SERVICES & SOLUTIONS:– Legal, organisational reforms and their

implementation;

– Design and implementation of critical and important national information systems;

– Tax collection with eFilling

– Transformation of business inspections;

– Public procurement and judiciary system modernisation;

– Reforms of state owned enterprises

– Creation of a secure digital environment.

OPERATIONAL MARKETS: – Emerging and frontier economies: CEE, East Africa,

South and Southeast Asia, Central America.

REFERENCES:– Rwanda Office of the Registrar General, Mauritius e-

Registry, Liberia Ministry of Commerce and Industry, Vietnam Business Development Agency,Lithuanian Central Mortgage Office.


Mauritius Registrar General Department. Before & After


IT INFRASTRUCTURE

BUILDING LEADING IT INFRASTRUCTURE SERVICES PLAYER IN THE BALTICS WITH SIGNIFICANT SERVICES EXPORT TO THE FRONTIER MARKETS.

INDUSTRIES & CLIENTS– General with focus on large corporate IT users and

public sector

SERVICES & SOLUTIONS– Design and installation of data centers;

– Design of super computers;

– Consolidation and virtualisation of servers and main IT infrastructure;

– Backup, emergency recovery and business continuity solutions.;

– Managed printing services – CopyPrint;

– Information system lifecycle management, 24x7 maintenance and support.

OPERATIONAL MARKETS– CEE, East Africa

REFERENCES– Vilnius University, Bank of Lithuania, National

Courts Administration, Litgrid, Reserve Bank of Zimbabwe, Burundi Central Bank, SEB Bank, DPD, Maxima, Ministry of Energy, Mauritius e-Registry


National Open Access Research Data Archive (MIDAS)


CYBER SECURITY

BUILDING GLOBALLY OPERATING CYBERSECURITY SOLUTIONS AND SERVICES PROVIDER.

INDUSTRIES & CLIENTS– Specialised public services providers (Law

enforcement, National CERTs, Telecom, National communication regulators), and corporates with high data sensitivity

SERVICES & SOLUTIONS– Cybersecurity incident resopnse Team (NRD CIRT);

– E-crime and abuse handling automation;

– Security assessment and review;

– Cyber defence technologies;

– Cyber security trainings.

OPERATIONAL MARKETS– CEE, East Africa and South Asia.

REFERENCES– Law enforcement offices, courts, National

communication regulators.


Annual cyber security conference„Cyber Defence East Africa“



BRINGING LOCAL SPECIALISED INDUSTRIES IT SOLUTIONS PROVIDERS TO GLOBAL SCENE.

INDUSTRIES– Energy, Utilities, Banks, Retail, Manufacturing &

logistics

SERVICES & SOLUTIONS– E-banking;

– Smart retailing;

– Other sector specific solutions.

OPERATIONAL MARKETS– CEE, Emerging and frontier economies: CEE, East

Africa, South and Southeast Asia, Central America.

REFERENCES– Lithuanian Centre of Registers, DnB bank in

Lithuania and Estonia, Šiaulių bankas, Medicinosbankas, Reitan Convenience in Lithuania and Estonia, R-Kioski in Finland


ETRONIKA received „Best of Show“ award at„FinovateEurope” in 2013 and 2014


PLATFORM FOR GLOBAL GROWTH…

200+ employees

200+ clients served every year

Projects delivered in 50+ countries worldwide since

1995


Target markets (CEE and MEA), regions are among the fastest growing markets enjoying 2-3 times higher than world average growth rates

During 2015-2018 IT costs in CEE are forecasted to increase by 7-8%; spending in MEA is forecasted to grow by 7-12%

...IN MARKETS WITH SOUND FUNDAMENTALS…


… AND SPECIFIC MARKET NEEDS

LIMITED SUPPLY OF COMPLEX

SOLUTIONS

EXECUTIONAL TRACK

RECORD

SMALL AND MID-SIZE PROJECT

TICKETS

SUPRA–NATIONALSAS KEY ACCOUNTS


FK program participants delivering trainings for Zanzibar National university IT students


PORTFOLIO COMPANIES DELIVERING GROWTH

Share of revenue in frontier markets:


PORTFOLIO STRUCTURE (2014 12 31)

PORTFOLIO ASSETS STRUCTURE mEUR EV/EBITDA P/E

Critical IT infrastructure services 13,20

6,7 12,4

Information systems design and development

0,70

Cyber security services 1,00

Other liquid assets (cash & receivables)

0,57

Total 15,47

CAPITAL STRUCTURE mEUR

Equity 11,92

Loans from Invalda INVL 1,65

Loans from portfolio companies 1,84

Other payables 0,06

Total 15,47

Source: Management estimate; Financial statements; Deloitte valuation

Portfolio structure by company value Portfolio capital structure

Critical IT infrastructure services85%

Information systems design and development 5%

Cyber security services 6%

Other liquid assets (cash & receivables) 4%

Equity 77%

Loans from Invalda INVL 11%

Loans from portfolio companies 12%


EXPLOITING GROWTH OPPORTUNITIES

3 years

5 years 8 years 10 yearsInvestment period

ACQUISITIONRaising capital facility for additional acquisitions of locally / regionally operating ICT companies

20 + mEUR(anchor shareholders committed)

DEVELOPMENTLeveraging companies‘ operations through add-on acquisitions, new market entry and cluster approach

20%+ IRR

EXITStructuring exit of mature businesses with global footprint

3 x MM


SEED GROWTHBUY-OUT –

TARGET MARKET

BALTIC ICT DEALS LANDSCAPEOver-supply of capital


INVESTMENT CRITERIA

ACQUISITION COMPETITIVE EDGE

RATIONAL VALUATION

PARAMETERS

INDUSTRY & GEOGRAPHY

FOCUS MATCH

EVIDENCE OF PRODUCTS/SERVICES

SUSTAINABILITY IN LOCAL MARKETS

STRONG MANAGEMENT

TEAM

NEW MARKETS

CAPITAL

FLEXIBLE OWNERSHIP STRUCTURE APPROACH

MANAGEMENTSUPPORT


CASE STUDY 1. ETRONIKA

DEAL STRUCTURE: • 80% EQUITY PARTICIPATION• TOTAL INVESTMENTS, INCLUDING

LOANS - UP TO EUR 400 000• COMPANY PROFILE:

- 1 of 50 most innovative FinTech50 companies in Europe

- Innovative e-banking, e-retail, mobile signature solutions

- Revenue: EUR 1.9 million in 2014- 40+ employees- Clients: DnB bank in Lithuania and Estonia,

Šiaulių bankas, Medicinos bankas, ReitanConvenience in Lithuania and Estonia, R-Kioskiin Finland and others.

• INVESTMENT RATIONALE: – Attractive entry valuation– Bringing capital to support new markets entry– Attractive client base to utilise cluster approach– Product portfolio with significant scaling

potential


PIPELINE PARAMETERS

CYBER SECURITY

IT INFRASTRUCTURE


BUSINESS CLIMATE IMPROVEMENT AND

E-GOVERNANCE

• Specialized Cyber & Information security solution providers, with local market footprint

• Baltics , EE• 2-3 Add-ons with EV range 0,5-1 mEUR / • 1 platform acquisition EV range 7-10 mEUR

• IT infrastructure services providers, data centers, • cloud solution providers • Baltics, Poland, Scandinavia• 4 Add-ons with EV range 0,5-1 mEUR• 4 Platform acquisitions with EV range 5-7,5 mEUR• 2 Minority participations with EV range 5-10 mEUR

• E-governance and public sector oriented solution providers, B2G oriented consulting services

• Baltics, Scandinavia• 3 Add-ons with EV range 0,5-1 mEUR• 2 Minority participations with EV range 20+ mEUR

• B2B solution providers with focus on dedicated IT user industries: financials, utilities, energy; ERP solution providers; GIS solution providers;

• Baltics, Eastern Europe, Scandinavia• 5-6 Platform acquisitions with EV range 3-5 mEUR, 2 with EV range 10 mEUR+• 5 Add-on acquisitions with EV range 0,5-1 mEUR

30+ potential acquisitiontargets

50 mEUR+ deals on target


2. VALUE CREATION MODEL

OPERATIONAL EFFICIENCY

- Financial discipline- Back-office and

internal processes optimisation

- Additionalmanagement support

DEVELOPMENT SUPPORT

- Capital and M&A support for add-on acquisitions

- Cost-efficient frontier markets entry

- Client references and executional track record stamp

STRUCTURING FOR EXIT

- Focus on reaching critical size and market footprint for strategic investors

- Intellectual capital & customer base sustainability

- Corporate governance practices


EXAMPLE 2. ENTERING MAURITIUS MARKET

Mauritius registrar general’s

office

2013. NRD AS in JV with a local partner signed a contract of Supply and Implementation of an eRegistry

System in Mauritius

NRD AS –project

management & consultations

BAIP - hardware

NRD UAB -development

NRD EA – 5 year maintenance

NRD UAB – development of Notary system

BAIP – additional hardware

E-signature

M-signature

Infobank

• Project value - 3.7 million USD,

• Funded by the Government of Mauritius and Investment Climate Facility for Africa.

Additional project

Additional project

Potential

Potential

Potential


3. EXIT STRATEGY CONSIDERATIONS

1. Extensive investment team track record

2. Structuring portfolio companies for strategic sale

3. Starting exit activities in year 5

TOP 5 INVALDA LT INVESTMENTS:

mEUR 124mEUR 59.9mEUR 22.46

SANITAS, ABInvested – mEUR 43.82, sold – mEUR 123.9

VILNIAUS BALDAI, ABInvested – mEUR 5.24, sold – mEUR 59.9

TILTRA GROUP AND KAUNO TILTAIInvested – mEUR 7.2, sold – mEUR 52.9

FINASTA Invested – mEUR 13.8, sold – mEUR 22.46

VALMEDA, ABInvested – mEUR 4.3, sold – mEUR 19.8


CASE STUDY 3. SANITAS – BUILDING REGIONAL PHARMACEUTICAL CHAMPION

August 2011

2003

June 2006

Invalda LT, AB invested in Sanitas

Acquisition of Polish pharmaceuticals producer Jelfa S.A. from State Treasury, PZU and other investors for EUR 161 million.

To finance Jelfa acquisition Sanitas attracted international private equity funds – Amber Trust (12.5 percent) and CVC International (17.1 percent). In total EUR 75.6 million was attracted.

Canadian pharmaceutical giant Valeant Pharmaceuticals International acquired Sanitas for mEUR 123.9

KPIs:

EUR (MILLION) 2002 2003

REVENUE* 8.64 8.95

EBITDA 0.94 1.04

NET PROFIT 0.01 0.09

EMPLOYEES 386 325

* More than half of revenues – contract manufacturing of injectables to Latvian Grindex.


CASE STUDY 3. SANITAS - EXIT

In August 2011 Sanitas was acquired by a Canadian pharmaceutical giant Valeant Pharmaceuticals International for an enterprise value was estimated EUR 365 million in this transaction.

Kaunas

Jelenia Gora

Prague

Vilnius

Warsaw

Moscow

Kiev

Bratislava

Sofia

Riga

Manufacturing Regulatory Out-sourcedCommercial

Budapest

• Leading generics producer;• Branded specialty focus;• 9 core markets in CEE/CIS, mainly Poland and Russia;• 5 core specialty areas;• 92 million EUR revenue; 30% EBITDA margin;• 390 marketed and 252 pipeline products;• 282 commercial employees;• In-house development and registration;• GMP-compliant manufacturing.

EUR (MILLION) 2008 2009 2010

REVENUE 84.2 86.7 91.9

EBITDA 18.9 21.9 27.8

EBITDA MARGIN 22.5% 25.3% 30.3%

NET DEBT/EBITDA

5.18 3.72 1.98

EMPLOYEES - - 1113

KPIs:


TARGET LEGAL STRUCTURE

SIZE: Starting cap - EUR 11.9 millionTarget cap – EUR 35 million I Hard cap – EUR 50 million

TYPE: Nasdaq Baltic listed closed end investment comapany

DOMICILE: Lithuania (supervised by the Central Bank of Lithuania)

TERM: 10 + 2 years

INVESTMENT PERIOD:

5 years

FEES STRUCTURE:2% management fee on market cap20% carry over 8% hurdle rate

MANAGEMENT COMPANY:

INVL Asset Management

AUDIT: Audited by Big 4 (currently – PwC)


TARGET LEGAL STRUCTURE

INVESTORS:

- Invalda INVLshareholders

- ManCo and key executives

- Institutional investors

- High net worth individuals (HNWI)

ADVISORY BOARD(On demand of investors)

- 3 representatives

INVESTMENT COMMITTEE

- 2 representatives from investors

- 3 representatives from management company

INVL Technology(Nasdaq Baltic listed vehicle)

INVESTMENTS:- Investment 1- Investment 2

Invalda INVL

INVL Asset Management

Appointment

Advisory

Appointment

Decision making

Investment

Revenue

Appointment

Asset management


FUND MANAGEMENT COMPANY

COMPANY:INVL Asset Management (former Finasta Asset Management) established in 2003

ACTIVITY: Diversified investment manager in the Baltic States

LICENSE: Licensed fund management company supervised by the Bank of Lithuania

AuM: 300+ mEUR

KEY PRODUCTS:8 mutual funds (market share in Lithuania – 49%*)11 pension funds (2nd and 3rd pillar)Private banking: ~250 HNWI discretionary portfolios

AUDITOR:The Management Company and all of its funds are audited by a Big 4 company (currently PwC).


REPORTING & COMPLIANCE GUIDELINES

QUARTERLY REPORTING PACKAGE

- Fund activity reports (financial statements, return on investment, risk rates, costs and information about the portfolio)

- Funds NAV, unit price, pro forma IRR.

ANNUAL REPORTING PACKAGE

- Annual portfolio valuation appraisal by independent valuation company

- Fund activity reports (financial statements, return on investments, risk rates, costs and information about the portfolio).

ON DEMAND INFORMATION DELIVERY

- Fund activity news- On demand meetings or conference calls with

fund executives

COMPLIANCE

- Regulator - The Central Bank of Lithuania- Custody – TBD- Valuation guidelines – compliance with IPEV and EVCA


OFFERING PRICING

37

PRE-OFFER NUMBER OF

SHARES

EXTERNAL VALUATION

MARKET SHARE PRICE

OFFERING PRICE RANGE

6.114.714

VALUATION ANALYSIS PERFORMED BY DELOITTE AS AT 31 DECEMBER 2014:

- Equity valuation EUR 11,9 million- EV/EBITDA – 6,7- P/E – 12,4

Share price: 1,946 EUR

AS OF END OF MAY 2015:- 2,00 EUR- Based on thin secondary market liquidity

EXPECTED 1,56 - 1,96 EUR


EXPECTED TIMELINE ‘2015

Q3Q2 Q4

New share issue placement until

3rd of July

DECEMBER: License from the Bank of

Lithuania

Reorganisation First closingConversion to closed end investment

company

Q1


CONTACTS

ANDREJ CYBAChairman of the Board, CEO

Bank Finasta, AB

Mobile: (+370) 320 68392

Phone: (+370 5) 203 22 33

Address: Maironio str. 11, LT-01124 Vilnius

E-mail: [email protected]

KAZIMIERAS TONKŪNASDirector

INVL Technology, AB

Mobile: (+370) 698 23368

Phone: (+370 5) 219 1919

Address: Gyneju str. 16, LT-01109 Vilnius

E-mail.: [email protected]


DISCLAIMER

This presentation is prepared by AB INVL Technology (hereinafter - theCompany).

The Company is not responsible for any third party decisions made by referring toonly this information and it does not accept responsibility for the cost of directand indirect losses caused by using only this information.

This information is an informative marketing material, it is not and cannot betreated as a proposal (an offer), investment advice or an investment research.

The corporate structure scheme is simplified. Unless it is indicated otherwise, thecompanies are owned 100 per cent.

Stated dates are preliminary and are subject to change.

Information provided in the marketing material represents the opinion of theCompany at the time of its presentation/publication. This information is a one-off,but it may be renewed at the discretion of the Company.

Value of financial instruments can both rise and fall, so there is a risk of losingsome or all of the invested funds.


Date post:	31-Jul-2015
Category:	Investor Relations
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INVL Technology - NASDAQ OMX Vilnius listed ICT investment company - 2015 06 09

Investor Relations