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SHORT VIDEO PRESENTATION
Please see the video: https://youtu.be/yiHPn1TOMlw
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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
www.invltechnology.com | [email protected]
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.)
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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
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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
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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
15+ years’ experience
in ICT sector M&A, HR,
Marketing and
Operations
NERIJUS
DROBAVIČIUS
Member of the Board of
INVL Technology
15+ years’ experience
in M&A, financial
analysis and setting up
management controls
7 yearsInvolvement with INVL Technology
9 yearsInvolvement with INVL Technology
9 yearsInvolvement with INVL Technology
9 yearsInvolvement with INVL Technology
1 yearsInvolvement with INVL Technology
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CLUSTER FOCUS AREAS
BUSINESS CLIMATE IMPROVEMENT & E-GOVERNANCE
IT INFRA-STRUCTURE
CYBER SECURITY
IT INTENSIVE INDUSTRIES’ SOLUTIONS
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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.
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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
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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.
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Annual cyber security conference„Cyber Defence East Africa“
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IT INTENSIVE INDUSTRIES’ SOLUTIONS
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
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ETRONIKA received „Best of Show“ award at„FinovateEurope” in 2013 and 2014
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PLATFORM FOR GLOBAL GROWTH…
200+ employees
200+ clients served every year
Projects delivered in 50+ countries worldwide since
1995
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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…
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… AND SPECIFIC MARKET NEEDS
LIMITED SUPPLY OF COMPLEX
SOLUTIONS
EXECUTIONAL TRACK
RECORD
SMALL AND MID-SIZE PROJECT
TICKETS
SUPRA–NATIONALSAS KEY ACCOUNTS
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FK program participants delivering trainings for Zanzibar National university IT students
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PORTFOLIO COMPANIES DELIVERING GROWTH
Share of revenue in frontier markets:
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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%
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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
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SEED GROWTHBUY-OUT –
TARGET MARKET
BALTIC ICT DEALS LANDSCAPEOver-supply of capital
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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
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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
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PIPELINE PARAMETERS
CYBER SECURITY
IT INFRASTRUCTURE
IT INTENSIVE INDUSTRIES’ SOLUTIONS
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
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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
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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
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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
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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.
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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:
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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)
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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
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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).
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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
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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
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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
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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]
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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.
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