KINGSTON: Nine-year-old information technology service providers tTech Limited is seeking to raise $50.2 million with an initial public offering of 15.47 per cent of the company to the public, and a further 8.73 per cent of shares for selected applicants including employees.
To be listed on the Junior Market of the Jamaica Stock Exchange (JSE), the company is using financial adviser and arranger GK Capital Management Limited and lead stock broker NCB Capital Markets Limited.
tTech has placed on offer up to 25,652,000 shares, inclusive of the 9,250,000 reserved shares at $2.50 per share. The offer will open on December 16 and close on the 18th.
The company has authorised shares numbering 106,000,000 of which 80,348,000 are already issued. The remainder are to be issued in the IPO.
Current shareholders are Charmaine and Edward Alexander with 51.1 per cent of shares, Hugh Allen with 10.94 per cent, Enqueue Limited with 18.98 per cent, and Auctus Holdings Inc with 18.98 per cent. Each will give up varying amounts of their shares to facilitate the current offer of 24 per cent of the company in the IPO.
The company says its intention is to use the proceeds of the public offering to inject additional working capital into its operations and to “allow it to effectively increase its productive capacity and, thereby, its service offerings and its ability to take on new business”.
For the six months to June 2015, tTech saw revenues of $81 million and net profit of $9 million. Management says sales improved by 28 per cent, with net profit before tax growing by 23 per cent. The company’s assets up to June were valued at $75.38 million.
The IPO will facilitate continued growth for the company by providing an injection of capital that will allow the company to further develop its managed IT services, particularly in the area of security, which has been identified as a service offer that will afford the company growth opportunities.
tTech also intends to pay the expenses associated with the invitation out of the fund-raising proceeds, estimating that the expenses in the invitation will not exceed $10 million.
tTech CEO Edward Alexander says that, if successful, tTech will be the first technology stock on the JSE, with managed IT services which are its core business and not a sideline.
tTech Limited was incorporated in Jamaica on December 1, 2006.
Currently its principal shareholders are Edward “Teddy” Alexander, Norman Chen, Christopher Reckord and Hugh Allen. The company has no parent company or subsidiaries. Its registered office and place of operation is 69 Harbour Street in Kingston.
”The main goals of the company are to help its clients to maximise value and minimise cost from their investments in information technology. These goals are achieved by providing services to manage customers’ IT infrastructure cost effectively, freeing up their customers scarce IT resources to concentrate on managing their mission-critical business applications,” Alexander told the Jamaica Observer.
Alexander says the company has successfully pursued its goals of helping businesses to “gain the benefits of economies of scale by spreading the costs of highly skilled IT personnel across multiple customers and companies.
Future strategic objectives for owners of tTech, he said, are to grow the security services portfolio and also provide services to assist customers to migrate from on-premises platforms to cloud-based platforms. This will allow customers to take advantage of the flexibility and lower cost of cloud-based platforms.
tTech also plans to increase consulting services in the areas of IT strategy business application selection and deployment, project management and business continuity planning, all of which are complementary to the services now provided by the company, Alexander said.
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