Innovative cloud-based integration and processing software platform

The platform services the financial services sector and dramatically reduces a client’s costs and saves time through its ability to translate, integrate and automate data ingested from the client’s various software systems and sources via cloud and on-premises software

Live ARMnet Ltd ASX: AR1

OnMarket | ARMnet Limited | ASX: AR1

Fixed Priced IPOType of Offer
05 Feb 20Offer Open
13 Mar 20Pay By
$0.20Price
Up to $11 millionSize of Offer
$2,000 Minimum Investment
Bridge Street CapitalLead Manager

Update: We have been advised by the Lead Manager that the Company has decided to extend the public offer closing date to 13 March 2020.  See new announcement available here

ARMnet has received investor bids in excess of the $8.5 million minimum amount to be raised for the IPO and has also exceeded the minimum number of investors required for shareholder spread requirements. 

The reason for the extension is that ARMnet has in the last few days been in discussions with the ASX in relation to the structure of the vendor consideration for the acquisition of Axcess Consulting Group Pty Ltd ("Axcess Consulting").  The expected result of these discussions is that the vendors of Axcess Consulting would receive additional ARMnet shares (escrowed for 24 months) instead of the cash consideration allocated to them in the proceeds of the IPO, as detailed in the IPO prospectus.  Provided the ASX and the Vendors agree to this change, ARMnet will have a greater amount of working capital to finance growth and a stronger balance sheet.  ARMnet will also have a larger market capitalisation, to the extent that additional shares are issued to the Vendors.

 

If this is the case, a supplementary prospectus will be issued and you will have the opportunity to manage your application if you wish.

Key Investment Highlights

  • The first iPaaS coming to ASX for the financial services market worldwide.
  • Clear sales, marketing and development strategy with a strong existing business, solid margins and profitable with no debt for implementation from Listing.
  • Existing platform with more than 40 clients in North America, Australia, Asia and the United Kingdom.
  • Trusted provider with over AUD$100 billion of client assets being serviced by the ARMnet Platform.
  • Attractive revenue model that can increase its annuity income streams from the integration of assets and transactions on the ARMnet Platform.
  • Software with low infrastructure costs, low coding with high functionality and developers that are highly experienced.
  • High client retention rates and scalable revenue model through delivery of core products through a cloud-based iPaaS.
  • Pro-forma revenues of $4.9 million for FY2019, an increase of 53% on FY2018 pro-forma revenues of $3.2 million
  • Large and fast-growing market The enterprise sales market in the iPaaS sector reached more than US$2.7 billion globally in in 2019. The growth over the next 5 years in the iPaaS market is expected to be double digit growth according to Gartner.
  • Unique specialist technology offering - an integrated and scalable iPaaS technology platform that builds on digital market changes with disruptive technology capabilities.
  • Highly experienced Board and management with decades of technology and financial services experience.

Introduction

ARMnet Ltd (ASX: AR1) is an innovative cloud-based integration and processing software platform as a service (iPaaS) servicing the financial services sector worldwide.  ARMnet Ltd was incorporated for the purposes of purchasing 100% of Axcess Consulting Group Pty Ltd (Axcess Consulting). The Axcess Consulting Group’s core business is the ARMnet Platform.  The ARMnet Platform is used by large corporate clients in the insurance, non-bank mortgage lending and funds management sectors. The platform dramatically reduces a client’s costs and saves time through its ability to translate, integrate and automate data from the client’s various software systems and sources via cloud and on-premises software. This allows multiple systems and processes to work together in a unified way for its clients’ data and information use.

Axcess Consulting is a well-established business with more than 40 clients in North America, Australia, Asia and the United Kingdom. Axcess Consulting is a trusted provider with over AUD$100 billion of client assets being serviced by the ARMnet Platform. The platform has enjoyed the security of multi-year contracts, and high levels of client retention, being approximately over 80% since inception.

The Company has enjoyed strong revenue growth, with pro-forma revenue for FY2019 of $4.93 million, a 53% increase on FY2018 pro-forma revenue of $3.23 million.  Pro-forma NPAT for FY219 was $319,312.

With nearly 83% of global enterprises moving to the cloud in 2020 the trend in software systems and data integration will be one of most important parts of a financial services companies’ digital transformation. Client data and outputs must move quickly and effortless and report in real time.  

Offer Overview

ARMnet Limited is looking to undertake an IPO on ASX to raise up between $8.5 million and $11 million via the issue of 42.5 million shares up to 55 million shares at an offer price of $0.20.  The company will have an indicative market capitalisation of approximately $26.0 million to $28.5 million at the maximum raise.  

Key Offer Statistics

Funds raised from the Offer will be applied as follows:

Above total includes:  existing cash as at date of prospectus $190,946, existing cash on acquisition of Axcess Partnership $434,607 and proceeds received under the Offer. ^ There is an adjustment of $635K that is retained for settlement adjustments.

For further information on the Key Offer Statistics and Use of Funds, please see the prospectus.

Industry Overview

ARMnet operates in the integration platform as a service (IPaaS) market which is one of the fastest growing IT sectors with a CAGR growth rate of 39.35% in 2019. Research estimates that the enterprise iPaaS market for subscription revenues reached more than US$1,690 million in 2018. In 2018 this represented a CAGR of 56% when compared with 2017 where the CAGR was 72%. Research estimates the iPaaS market will reach US$2.5 billion within the next 12 to 18 months and grow at double digit figures over the next 5 years. This market position will be enhanced in 2020 with an estimated 83% of enterprises moving to the cloud opening up more opportunities. This market dynamic, and the growing leverage to the size of the financial assets their clients service using the ARMnet Platform, offers a tremendous opportunity for the Company with a shift on IT spending away from traditional (non-cloud) offerings to new cloud-based alternatives like the ARMnet Platform. ARMnet intends to take advantage of a growing iPaaS market in financial services for its continued profitability.

Global IPaaS Market, 2015-2018 and 2020F

The Platform

The ARMnet Platform comprises multiple software codes including a customer relationship management module (CRM module), origination portals for assets, software interchange software programs and workflow and reporting engines that are built on an industry standard Microsoft .NET framework. The platform is cloud based, which means that it is accessible via smart phones, tablets or email from anywhere at any time.

The ARMnet Platform combines software applications, data and media channels in an open architecture platform that provides an integrated solution for each phase of a financial services business. This includes marketing, sales, user interaction, asset processing and financial reporting throughout to back office management.

The design of the ARMnet Platform provides flexible product modules and simple configuration. This provides clients with the option to use the ARMnet Platform as an “out of the box” software product or as a fully configurable and customizable software product to suit specific business and product needs.

Components surrounding the ARMnet Platform including the CRM module, workflow and translation engines and reporting outputs.

What problems does the ARMnet Platform solve?

Financial institutions globally utilise multiple systems across a wide range of functions, and as most of these systems cannot talk to each other, this creates delays, costs and errors.  The ARMnet Platform empowers its clients with the ability to consolidate software systems to save cost and time and also to originate, service and report on multiple financial asset types on the one central platform. Clients have the ability to decide when to turn off redundant software systems that can now run on the ARMnet Platform, which reduces their clients’ technology infrastructure and software coding costs. It is this aspect that makes the ARMnet Platform so useful to a broad range of financial services companies rather than a single narrow subset of financial services companies.

Importantly, it also helps large complex financial services organisations manage and move data to the cloud and digitally transform their business.

Product Modules

Currently ARMnet provides to clients’ software services for varying business sectors in the non-bank software lending market. This ranges from commercial and residential lending, contributory mortgages, debt structures, managed funds, securitisation, leasing, P2P lending and others. ARMnet’s existing sales approach has been to consolidate its position as a dominant player in this sector of the market.  

However, the ARMnet Platform’s technology is agnostic to any asset class it services and it has been in the process of re-branding its products and launching several new product modules on a subscription basis and three user services modules for different business sectors for which it is tendering with effect from Listing.

Business Overview

The ARMnet Platform is a global cloud-based iPaaS platform for the financial services industry and particularly for the non-bank lending market. It is an iPaaS solution that provides software solutions for asset origination and integration software and automation of workflow management that address each phase of the service lifecycle of financial services businesses and their assets.

Axcess Consulting has operated for nearly 15 years. It has grown organically and focused on the establishment of a strong alignment with the financial services industry. In particular, Axcess Consulting has a track record of successfully tendering and integrating businesses into its ARMnet Platform with over 80 integrations from third party systems for clients with varying customised solutions found.

Countries and clients using ARMnet Platform

Some Global Clients

Clients are from across a wide range of sectors and industries, as well as being geographically spread across North America, Europe, and Asia-Pacific region. Axcess Consulting’s business is characterised by strong recurring revenue and high levels of client retention, being approximately over 80% since inception. The ARMnet Platform is currently used to manage over $100B of assets and transactions for clients worldwide. The following represent some of Axcess Consulting’s key clients.

Growth Strategy

ARMnet’s growth strategies are based upon the following:

  • strong organic growth in existing product segments in the cloud;
  • cross-selling opportunities between product lines and clients that require more than one service;
  • reliance on the ongoing growth in funds under administration and custody;
  • reliance on the ongoing growth in superannuation in Australia;
  • expansion of operational footprint through synergistic acquisitions; and
  • expansion of Group business across the broader Asia Pacific, Canada, United Kingdom and the United States. ARMnet has a clear growth strategy to capture the opportunities which includes opening sales offices in the United Kingdom and North America, expanding sales and business analysts and developers and increasing the expenditure on marketing and brand awareness of ARMnet.

Revenue

Revenues are generated by way of subscription and licensing, maintenance, personalisation and servicing fees, typically charged in accordance with agreed rates set out in service agreements with each respective client.

Historical revenue types, billing timings and revenue percentage ranges

Revenue primarily includes revenue derived from the client’s use of the ARMnet technology platform (subscription and licensing revenue), development and modification of client databases (development and personalisation revenue) and support services.

The Group (including Axcess Partnership and ARMnet’s) historical Pro-forma financial performance

Key Board and Management

Nick Brookes– Non-Executive Chairman (ARMnet)

Nick has significant experience in successfully managing growth businesses in trusteeship, managed funds and superannuation at both Board and Chief Executive levels. Nick was a founder of CCSL Limited and until recently was the Chairman of Linear Asset Management Limited (“Linear”) which oversees Linear’s Platform and Administration solutions to the Financial Services industry.

David Grey – Managing Director and CEO (ARMnet)

David has over 30 years management, corporate and financial services experience and worked on various cross border transactions in Germany, the United States, Britain and Singapore and has been directly involved in the development, restructure and merger and/or acquisition of various companies.

Alan Beasley – Non-Executive Director (ARMnet)

Alan has worked in the Investment Banking and Investment Management industries for over 30 years, with Bankers Trust Australia, Goldman Sachs Asset Management, Massachusetts Financial Advisors and BNP Paribas Asset Management Ltd - the last three positions as Managing Director and Australian Country Heads.

Brendan Dickson – Non-Executive Director (ARMnet)

Brendan has over 20 years of experience in financial markets encompassing roles in Direct Equities and Equity Derivatives, Funds Management, and Foreign Exchange. Brendan’s career began in foreign exchange from 1995 to 2000 with firms such as Deutsche Bank Sydney, Macquarie Bank Sydney and finished with Deutsche Bank London.

Graeme Blackett – Company Secretary (ARMnet)

Graeme Blackett is Company Secretary of the Group. Pursuant to the consultancy agreement dated 8 October 2019 and has over 25 years company secretarial and governance experience in various listed and private companies, as well as in private practice.

Alison Crealy – CFO (ARMnet)

Alison is a Big-4 trained finance and mergers & acquisitions professional who also has extensive international commercial and company secretarial experience.

Ivan Colak – Executive Director and CTO (Axcess Consulting)

Ivan is a co-founder and director of Axcess Consulting and an accomplished executive with more than 30 years of domestic and global experience in technology services. He is an expert in developing innovative technology services and strategies that have successfully delivered tailored business solutions to an increasingly demanding marketplace.

Kelvin Poole – Executive Director (Axcess Consulting)

Kelvin has over 40 years of executive leadership experience in lending and banking and is a founder and executive director of Axcess Consulting. Prior to establishing Axcess Consulting, Kelvin held numerous senior management positions within large Victorian lending institutions such as the State Bank of Victoria and the Farrow Corporation including being appointed National Lending Manager.

Laurie Atkinson – Executive Director (Axcess Consulting)

Laurie is a senior IT executive with over 30 years of experience working in the financial services and technology sector. Previously, Laurie worked both in Australia and the UK consulting and lecturing as a network and communications specialist.

Risks

You are encouraged to read the prospectus carefully as it contains detailed information about the Company and the Offer. Like all investments, an investment in ARMnet Ltd carries risk. As set out in Section 8 of the prospectus, ARMnet Ltd is subject to a range of risks, including but not limited to reliance on key personnel, risk of significant control by existing shareholders and vendors, replicability, substitutability and changes of business model, failure to retain existing clients, competition, technology developments, software, technology and system related risks and security breach and data privacy.

 

Section 734(6) disclosure: The issuer of the securities is ARMnet Limited ACN 619 705 207. The securities to be issued are ordinary shares. The disclosure document for the offer can be obtained by clicking on the link above. The offers of the securities are made in, or accompanied by, a copy of the disclosure document. Investors should consider the disclosure document in deciding whether to acquire the securities. Anyone who wants to acquire the securities will need to complete the application form that will be in or will accompany the disclosure document (which can be done via the electronic application form which will become available by clicking the bid button above).‚Äč

OnMarket staff acquired shares and options in ARMnet in an equity raising conducted in July 2017.  Further information is contained in 1.7.2 of the Prospectus.

Discover investment opportunities here

Tap 'More Info' to get access to free research, all company releases, and invest instantly for shares.


IPO Live

ARMnet Ltd ASX: AR1

ARMnet Ltd
Innovative cloud-based integration and processing software platform servicing the financial services sector worldwide

 

ARMnet has received investor bids in excess of $8.5m and will extend the offer until 13 March due to discussions with ASX in relation to the structure of the vendor consideration for the acquisition of Axcess Consulting Group Pty Ltd. New Announcement here

 

ARMnet Limited (ASX: AR1) is an innovative cloud-based integration and processing software platform as a service (iPaaS) servicing the financial services sector worldwide. The ARMnet Platform is used by large corporate clients in the insurance, non-bank mortgage lending and funds management sectors. The platform dramatically reduces a client’s costs and saves time through its ability to integrate and automate data, allowing multiple systems and processes to work together in a unified way and assists to complete their processing needs.

$0.20Price
Up to $11 millionSize of Offer
05 Feb 20Offer Open
13 Mar 20Pay By
IPO OnMarket Bidding Closed

Tartana Resources Ltd ASX: TNA

Tartana Resources Ltd
Copper-zinc resources exploration company, projects in Queensland and Tasmania

 

Tartana Resources Limited (ASX: TNA) is focusing on copper and zinc, two commodities which are highly leveraged to economic growth, particularly in China and the electric vehicle revolution. Tartana Resources has two key project areas, the Tartana Copper/Zinc project in near Chillagoe in north QLD and the Zeehan Zinc Slag project in western TAS – all on granted mining leases. These projects offer potential for cash flow generation, as well a significant exploration appeal with porphyry copper targets.

$0.20Price
$4m - $6mSize of Offer
04 Jul 19Offer Open
02 Mar 20Pay By
IPO Closed Feb 2020

AML3D Ltd ASX: AL3

AML3D Ltd

The AML3D Limited IPO has successfully closed and was heavily oversubscribed. Allotment and listing dates will be advised shortly.

Fully Funded
$9 millionSize of Offer
Foster Stockbroking Lead Manager
IPO Closed Jan 2020

thedocyard Ltd ASX: TDY

thedocyard Ltd

thedocyard Ltd (ASX: TDY) is a revenue generating developer and provider of cloud-based software specifically built for managing the entire life cycle of any corporate or commercial transaction on one central platform. It operates a Software as a Service (SaaS) business model. 

Fully Funded
TBDSize of Offer
Barclay Pearce Capital Lead Manager
IPO Closed Jan 2020

Little Green Pharma Ltd ASX: LGP

Little Green Pharma Ltd

The Little Green Pharma Ltd IPO has closed via OnMarket.  The IPO was fully underwritten by Canaccord Genuity, and OnMarket had a limited firm allocation.  Allotment of shares has occurred, with the ASX listing confirmed for 1pm, Thursday 20 February 2020 (AEDT).

Fully Funded
$10 millionSize of Offer
Canaccord Genuity Lead Manager
IPO Closed Jan 2020

Emerald Clinics Ltd ASX: EMD

Emerald Clinics Ltd

Emerald Clinics Ltd has established a network of specialist Clinics staffed and managed by experienced clinicians who have received training in cannabinoid medicine and are supported by a purpose-built technology platform that securely captures clinical data from consenting patients to generate a unique real-world clinical evidence data asset.

Fully Funded
$6 millionSize of Offer
PAC Partners Lead Manager
RTO Closed Jan 2020

Tesoro Resources Ltd ASX: TSO

Tesoro Resources Ltd

The Tesoro Resources Ltd offer has successfully closed. The company will re-list on 7 February 2020.  

Fully Funded
$4.6 millionSize of Offer
PAC Partners Lead Manager
IPO Closed Dec 2019

Limeade, Inc. ASX: LME

Limeade, Inc.

Limeade, Inc. is a Washington State incorporated, leading employee experience software as a service (SaaS) provider. Through the Limeade platform and its integrated software solutions, Limeade helps organisations better care for their employees, with the goal of driving higher employee engagement and well-being, and lower employee turnover.

Fully Funded
$100 millionSize of Offer
Macquarie/Moelis Australia Lead Manager
IPO Closed Dec 2019

Founders First Ltd ASX: FFL

Founders First Ltd

Founders First Ltd is an Australian based craft beverage ‘accelerator’ operated by a group of leading liquor industry professionals. The company invests in select craft beverage businesses alongside their founders and accelerates their growth through the provision of capital, sales and marketing, supply chain and management expertise and the operation of venues.

Fully Funded
$15.8 millionSize of Offer
Bell Potter Lead Manager