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Letus Capital presentation


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Letus Capital presentation

  1. 1. Letus Capital SA Company presentation
  2. 2. AGENDA 3 • Introduction • Offer • References • Case study • Portfolio
  3. 3. 4 Introduction
  4. 4. LETUS CAPITAL is a company providing corporate finance advisory oriented especially on capital raising by finance and strategic investors in mergers and acquisitions (M&A), MBO/LBO transactions, sales of companies as well as raising capital through the Stock Exchange (IPO), NewConnect (private placement) and coordination of bonds financing. We also prepare prospectuses, business plans, information memorandums, conduct companies valuations and due diligence researches. On the beginning of LETUS CAPITAL`s business activity in 1990 (at that time TAG), the company was preparing to fulfill advisory functions in finance and business strategy (corporate finance) through intensive staff training. Initially TAG was a small company, which gained its position on the market of advisory services. Intensive development has resulted in winning and implementing large projects for companies, such as SA, Graal SA and PKN Orlen SA. European Medal • In 2002 LETUS CAPITAL was awarded the European Medal by Business Centre Club - prestigious club of entrepreneurs and the largest organization of individual employers in Poland - for the high quality of its corporate finance advisory. Warsaw Stock Exchange Partner • LETUS CAPITAL, among the independent consulting firms for small and medium-sized enterprises, has a very rich experience and is one of few consulting companies awarded by the Stock Exchange in Warsaw - in 2005 we became a partner in the program „Partnership in Going Public”. We are WSE IPO Partner for SMEs. In 2007 we were invited by the Warsaw Stock Exchange to work together to develop the Alternative Trading System (NewConnect). Public Company • In 2008 we transformed into joint-stock company. On 20th May, 2009 our company debuted on NewConnect. Since then LETUS CAPITAL has become a public company quoted on alternative market of Warsaw Stock Exchange. Introduction 5 Description of the activity
  5. 5. Top M&A Financial Adviser • According to ISI Emerging Market DealWatch, LETUS CAPITAL was in the lead of most successful consulting companies in Poland (report for the period Jan 2008 - Mar 2009). In terms of the number of completed transactions of capital acquiring, LETUS CAPITAL was placed on 9th position. Polish Leader of Development • In December 2010 LETUS CAPITAL won 1st place in the competition for Polish Leaders of Innovation and Development, under the patronage of Ministry of Economy, National Bank of Poland, WSE and Polish Agency for Enterprise Development. LETUS CAPITAL provides professional, effective and efficient implementation of the activities. The high quality of our services is given by many years of experience and modern methods of achieving success. Thanks to having substantial experience and operating in the field of private business we are prepared to realise our tasks in the best way. We are entrepreneurs, which have highly-qualified professionals. Thanks to us companies can raise capital necessary to their development and increase value. Until now LETUS CAPITAL has realised over 100 projects within 10 wide branches, what gives the company a substantial experience and a good knowledge of possible value drivers in potential investments. Cumulative value of transactions in which we participated is almost EUR 800 million. Introduction 6 Description of the activity
  6. 6. 7 Offer
  7. 7. I. Mergers and acquisitions As s result of an progressive integration of Poland with EU markets, foreign companies place Poland in the field of their own activity. An increased interest of investors towards local companies and production factories is easy to notice. Since we are an advisory company, we prepare structures of takeovers, we plan and implement strategies for purchasers and entities for takeovers. • Sourcing targets for a takeover • Analysis of the targets and due diligence research • Valuation of the targets • Negotiations and finalizing the transaction II. MBO/LBO transactions Leverage and managers buyouts are these kind of transactions in which a group of purchasers consists of managers who take a capital control over a company with an active role of financial investors. The idea of the transaction is that the group of purchasers (managers) engages a small amount of capital comparing to the size of the transaction. • Sale conditions establishing • Investment profitability analysis • Valuation and preparation of business plan • Negotiations and final agreement Offer 8 Core business
  8. 8. III. Raising capital Financing is one of the most complicated issues in the field of a company management. An appropriate use of financing by debt allows reducing the cost of equity as well as to increase the effectiveness of other resources owned by a company management. The equity is the most valuable resource of a company. III.1 IPO One of the way to raise capital is initial public offering (IPO). It is attractive form of capital raising especially for companies with wide range of activity and high potential for development. We are one of few companies singled out by Warsaw Stock Exchange by becoming partner in the program for capital raising for SMEs. In 2005 we became a partner in the program of capital raising for SMEs. Purposes of the program are to support companies which seek capital on capital market and to facilitate them establishing contacts with consulting enterprises dealing with introducing companies to this market. In the group of partner companies there are experienced entities, which cooperate with small and middle enterprises in the field of primary market. • Conversion into join stock company (optional) • Increasing the capital (pre-IPO, optional) • Strategic advisory with respect to capital market requirements • Preparation of IPO: choice of brokerage house, statutory auditors, PR agency Offer 9 Additional activity
  9. 9. III.2 Venture Capital/Private Equity Venture capital is a specific way of enterprises` financing. A company increases capital by issuing shares for determined investor. In this way a company raises capital and investor becomes shareholder. Term of this investment is determined before the beginning of whole process and can last up to several years. At the end of investment venture capital fund finalizes it by selling shares. This type of financing covers companies which are not quoted on stock exchange - main purpose of venture capital fund is to develop company, introduce it to stock exchange and then sell. IV. Restructuring Restructuring processes advisory includes actions which aim towards enhancing financial and market position of a company. The target of a Restructuring Program is to improve economic and financial position of a company. The effect of the program is often visible in the form of a profitability recovering and a financial liquidity improvement. • Analysis of the reasons of a company poor standing • Restructuring plan preparation • Detailed plans preparation • Presentation of a conception • Implementation and control V. Documents & elaborations We prepare also prospectuses, business plans, information memorandums, conducts companies valuations and due diligence researches. All documents are preparing with the highest professional care. Offer 10 Additional activity
  10. 10. 11 References
  13. 13. 14 Case study
  14. 14. WSE Main Market Indexes: WIG, sWIG80 ISIN: PLINTEG00011 deals with distribution of advertising materials (mainly advertising newspapers for supermarkets) and provides postal services by InPost. InPost is one of the principal Poczta Polska (the biggest postal operator on the market) competitors. SA has more than 100 regional offices and the central warehouse in Piotrków Trybunalski. couriers deliver shipments in several hundred cities in Poland. The company distributes nearly 100 million pieces of printed advertisements and leaflets monthly. cooperates with the largest retail chains in Poland, such as Auchan, Elea, E.Leclerc, Lidl and Real. It employs more than 7 000 people. Stages of cooperation • LETUS CAPITAL (at that time TAG) was a member of consortium preparing SA to debut on the Warsaw Stock Exchange and IPO • LETUS CAPITAL was a strategic adviser for in the process of implementation new services and entering a postal market • Our company advised on merger between with advertising agency Fibra-Hallo - the main competitor in branch of distribution an advertising materials • Negotiations concerning acquisitions on direct marketing market • In 2006 LETUS CAPITAL raised capital for by issuing bonds • Our company prepared the documents: financial part in the prospectus, business plans, valuations, information memorandums, budgets Case study 15
  15. 15. WSE Main Market Indexes: WIG, sWIG80 ISIN: PLINTEG00011 Effects of cooperation • The shares attracted so much interest that it was necessary to make a 80% reduction in the allocation of shares • SA is currently sole postal group quoted on the Warsaw Stock Exchange • The capitalization of company amounted circa PLN 2 billion Since its debut in October 2007, the company`s share price has risen by 20 times. was chosen as best investment of 2008 and in 2010 was chosen as one of most valuable companies listed on the Warsaw Stock Exchange. Current capitalization of the company is over PLN 800 million. (2012/9/13) Case study 16
  16. 16. WSE Main Market Indexes: WIG, mWIG40 ISIN: PLMSTSD00019 Energomontaż-Północ was established in 1953 as a state-owned enterprise. The scope of company`s activity includes complex execution of the construction/erection works, commissioning of objects, warranty and non-warranty service, shop manufacture and prefabrication of piping and steel components. The shares of the Company made its debut at the WSE on 15 April 1998. In 1999, the Company was awarded with the „Brown Bull” award for one of the best companies on the basic market. During 10 years the shareholders, the shares` value, as well as the equity capital have undergone to changes. The strategic shareholder of Energomontaż-Północ became Polimex-Mostostal, one of the biggest Polish construction groups. Stages of cooperation • LETUS CAPITAL (at that time TAG) prepared the due diligence of subsidiary companies • LETUS CAPITAL was the leader of the team organized an issue of restructuring shares after debt conversion. LETUS CAPITAL was responsible for preparing a part of prospectus as well as coordinating all actions connected with preparing the whole document. All works were carried out in 2004. Effects of cooperation • The company acquired two foreign investors, a debt relief was carried out and also a share price growth was over 200% over three years Case study 17 Energomontaż-Północ
  17. 17. WSE Main Market Indexes: WIG, WIG20 ISIN: PLPKN0000018 Polski Koncern Naftowy ORLEN SA is the largest Polish and one of Central Europe`s largest refiners of crude oil with market value over PLN 18,3 billion. PKN Orlen specializes in processing crude oil into world-class unleaded petrol, diesel, heating oil, and aviation fuel as well as plastics and other petroleum related products. Stages of cooperation • In cooperation with international firms: Snamprogetti and ABB Lummus Global Gmbh, LETUS CAPITAL (at that time TAG) prepared the financial part of business plan, evaluated PKN Orlen`s contribution in kind and prepared profitability analysis of investment • LETUS CAPITAL created, on the basis of a technological and economical data, detailed financial model of the project (ca. 1600 verses of assumptions) • We prepared financial projections for 15 years and evaluated contribution in kind (installations owned by PKN Orlen) • LETUS CAPITAL estimated profitability of a project for PKN Orlen SA (IRR, NPV) and prepared analysis of sensitivity based on Palisade software Effects of cooperation • The value of investment amounted USD 500 million Case study 18 PKN Orlen
  18. 18. WSE Main Market Index: WIG ISIN: PLGRAAL00022 Graal has been on the market since 1989. The Company is the leader of canned fish market production and distribution in Poland. For the time being, the Graal Capital Group is the biggest enterprise of fish processing industry as far as a size, income, turnover and assortment variety are concerned. The portfolio of the Graal Capital Group contains such brands as Graal, SuperFish, Black Rose, Koral, Kordex, Gaster, Tess, Meg and EraRyb. Stages of cooperation • Preparing conception of strategic activities, corporate profile, information memorandum, business plan and valuation • Acquisitions advisory - we conducted negotiations with POLINORD and SYRENA and prepared due diligence of these companies IPO advisory • LETUS CAPITAL (at that time TAG) was the leader of the team, which objective was to introduce the company to the Warsaw Stock Exchange • LETUS CAPITAL was responsibility for preparing a part of prospectus as well as coordinating all actions connected with preparing the whole document. All works were carried out in 2004 and IPO took place in January 2005. Effects of cooperation • A share price growth was over 200% over two years • The value of raised capital in IPO amounted to PLN 21.9 million Case study 19 Graal
  19. 19. WSE Main Market Index: WIG ISIN: PLGRAAL00022 LETUS CAPITAL (at that time TAG) played the significant role in the process of consolidation of several fish market entities around the leader in fish preservation industry – „Superfish” from Kukinia, which was our Mandator. Currently, Superfish belongs to Graal SA. Stages of cooperation • In the first stage of cooperation we made financial and economic analysis of Superfish, further more we introduced a new accounting plan, system of financial analysis and costs analysis (monthly and annual), controlling, new effective organization structure as well as new document circulation • Next stage was to select an optimal financing method of the company and acquiring a financial investor • In 1999 some financial investor proposed to make an investment in the company • Further on we carried out a consolidation of companies without any external investment • LETUS CAPITAL sought companies wanted to join the Capital Group and conducted their analyses together with valuations Effects of cooperation • LETUS CAPITAL represented founders of the company and the goal of the activities consisted of the maximization of the value of the Company • The industry investor acquired the company with the valuation 2.5 times higher than the previous offers Case study 20 Superfish
  20. 20. Limited company In April 1999, LETUS CAPITAL (at that time TAG) became an economic and financial advisor of Marflex - the company with significant position in domestic market of plastic packaging. Stages of cooperation • We conducted and implemented systems: financial analysis and planning, management reporting, created a system of working capital control • Investment planning - LETUS CAPITAL has developed an investment plan of the company, assuming increasing a domestic production capacity through reorganizing the production process and investments in new technological lines • The strategic plan for next 5 years, including a market situation analysis, SWOT analysis, mission, strategic goals, determine how to obtain a strategic advantage over competitors, financial plans and sensitivity analysis to deviations from the assumed size of the plans and also search for sources to investment financing Effects of cooperation • LETUS CAPITAL led to conversations with a financial investor who was willing to invest in Marflex - LETUS CAPITAL`s specialists began negotiations with a professional investor who accepted the higher company`s valuation • In result of our collaboration is over 6 times increase of annual value of the company Case study 21 Marflex March 1999 October 2000 PLN X million PLN 6,25X million
  21. 21. NewConnect Market (ATS) Index: NCIndex ISIN: PLONLIN00013 Analizy Online SA is specialized, independent analytical center, which continuously monitors and analyzes the situation in the particular capital market segments. Stages of cooperation • LETUS CAPITAL prepared a due diligence, valuation of the company, memorandum and an information document • On 5th October, 2010 the company successfully debuted on NewConnect • The rights to shares (PDA) at the opening increased by 44.6%, while quotation was closed by 73.5% increase Effects of cooperation • Investors acquired the company`s shares worth PLN 1.3 million in just 4 days, while over-subscription amounted 71% • The company intended to spend the raised capital to increase the development and growth dynamics through the implementation of several new projects, concerning providing services in the field of asset management and development the portal about investment funds Case study 22 Analizy Online
  22. 22. 23 Portfolio
  23. 23. The investment activity of LETUS CAPITAL is realized in the form of a investment boutique. We are looking for medium- and long-term investments and purchases shares of companies, which are usually not listed on public market. The aim of these kind of investments is especially to increase the companies` capital. LETUS CAPITAL gets more than 10% of the share capital (preferably 20-50%). Entrepreneurs gain the capital needed for dynamic development and start collaboration with financial partner who has an extensive business experience. LETUS CAPITAL during the investment often collaborates with venture capital/private equity and business angels, whose participation in the project positively affects the risk and stabilization of the investment. The last stage of investment is company`s debut on a public market or a private exit from transaction. Alumast SA The company is innovative, dynamically developing enterprise, which produces flag poles, lighting columns, flags, with the use of advanced technology. Alumast is the main producer on Polish market, significant exporter to European markets with favorable prospects of becoming leader in Europe. LETUS CAPITAL provided services for Alumast SA during the private placement, and in January 2008 introduced the company into NewConnect, after that being its Authorised Adviser for over 2 years. LETUS CAPITAL SA in December 2010 invested an amount of PLN 0.9 million by purchasing 300,000 shares of Alumast. Currently LETUS CAPITAL SA holds 9.8% of the share capital of Alumast. Portfolio 24 Current investments
  24. 24. ASSG SA The company`s activity focuses on sale outsourcing services (call center) and sales support activities, mainly for telecommunication companies, media, finance and insurance industry. In November 2010 LETUS CAPITAL signed an investment contract with the ASSG sp. z o.o. - LETUS CAPITAL SA with co-investor funded ASSG sp. z o.o. with amount of PLN 2 million. LETUS CAPITAL purchased shares that represent 37.5% of the share capital. ASSG`s turnover in 2010 was PLN 3.5 million. ASSG sp. z o.o. has been operating as ASSG SA since 16 Dec 2011. Portfolio 25 Current investments
  25. 25. PTWP Polskie Towarzystwo Wspierania Przedsiębiorczości (EN: Polish Association for Supporting Entrepreneurships) works in the publishing and training industry since 1995. The activity also includes organizing multination economic congresses and managing several specialized economic web portals. In 2000 LETUS CAPITAL SA (then: TAG) acquired a package of 207,400 shares of PTWP for the amount of PLN 195,000. The purchased package represented 12.9% of the entire share capital of PTWP. In the first quarter of 2010 LETUS CAPITAL finalized the investment. The package of shares was sold for PLN 1.0 million and the profit amounted to PLN 805.0 thous. The simple rate of return was 413% and IRR 18%. Positive Advisory SA Positive Advisory is a IT consultancy, headquartered in Poland with office in Austria and a presence in Singapore. It delivers credit, operational and financial risk monitoring and performance management solutions primarily for the banking & financial services sector in response to comprehensive economic and regulatory risk assessment and compliance needs of our international clients. LETUS CAPITAL finalized the investment in August 2010. The 1,840,000 shares, representing 25.41% of the share capital of Positive Advisory, has been sold for a total amount of PLN 736,000. Profit on sale amounted to PLN 348,500 (90% of simple rate of return). Portfolio 26 Exited investments
  26. 26. Nicolas Games SA Nicolas Games SA was a dynamically developing firm operating in the sector of electronic leisure, producing and selling computer games with the market presence since 2004. In 2007, LETUS CAPITAL invested own funds in the extension of the offer of Nicolas Games. In 2008, the Company was the largest distributor and a pioneer of the sales of games in Poland for the Macintosh platform. On April 2, 2008, the Company debuted at the NewConnect previously acquiring PLN 4 million. The entire work related to the capital acquisition and the introduction to NewConnect was carried out by LETUS CAPITAL SA. During the 2009 crisis on the retail market, LETUS CAPITAL carried out the restructuring of the company and accelerated the change of its business profile. Nicolas Games has been the producer of computer games only for all the global markets since 2010. The premiere of the first own computer game „Afterfall: InSanity” on a global scale took place in November 2011. Due to the complexity of the project and its visible scheduling in stages, the investment in Nicolas Games SA can be divided into two stages: (i) venture capital and the restructuring, and (ii) start-up and expansion. Summing up: • Investment made in 2007 - 2011 • PLN 3.2 million of the invested capital • PLN 2.6 million of the gross profit on the investment • 68% - average IRR • 159% - simple rate of return Portfolio 27 Exited investments
  27. 27. Telemedycyna Polska SA The main area of activity of Telemedycyna Polska (EN: Telemedicine Poland) is to supply the medical services with a distant customer (by phone, Internet and radio) located anywhere, for example at home, on holidays or at work. LETUS CAPITAL purchased 20,0% of the share capital at a total price of PLN 200,000. In August 2010, the company debuted on the NewConnect. A month later LETUS CAPITAL sold 300,000 shares of Telemedycyna Polska SA to Private Equity Fund (own by the biggest Polish insurance group PZU) at a price 10 times higher than the cost. The profit from transaction amounted PLN 675,000 and the simple rate of return on investment was 900%, while IRR - 97%. In 2011, the remaining 40% of the stock of the company was sold. Summing up: • The entire package of 500 thousand of shares sold for PLN 1.25 million in total • The sale of the entire package brought PLN 1.05 million of gross profit to the company • LETUS CAPITAL SA realized the simple return rate of 525% Consorg SA The company specializes in building and implementation of innovative solutions for budgeting, controlling and supporting the management, paying special attention to the consolidation of financial statements. The company offers IT solutions, consulting and training services. The flag product of Consorg is a Business Intelligence software. In July 2009 LETUS CAPITAL took over 450 shares in DGiZI Consorg sp. z o.o. The shares represent 15.12% of share capital and entitle to 450 votes at the General Meeting of Shareholders. In August 2011 Consorg was transformed info plc company. Letus Capital exited the company in 2013. Portfolio 28 Exited investments
  28. 28. Contact29 L E T U S C A P I T A L S A K O Ś C I U S Z K I 4 3 / 7 4 0 - 0 4 8 K AT OW IC E , P O L A N D T E L + 4 8 3 2 7 3 3 5 9 2 2 + 4 8 3 2 7 3 3 5 9 2 3 F A X + 4 8 3 2 7 3 3 0 2 9 8 o f f i c e @ l e t u s c a p . c o m w w w . l e t u s c a p i t a l s a . c o m T A X I D 6 3 4 - 0 1 3 - 5 1 - 2 7 S T A T I S T I C N O 0 0 3 4 4 2 4 1 9 DISTRICT COURT IN KATOWICE VIII COMMERCIAL DIVISION OF THE NATIONAL COURT REGISTRY R E G I S T R Y N O 0 0 0 0 3 1 0 9 0 2 SHARE CAPITAL PLN 889.000 (fully paid)