Procurri yesterday launched its initial public offering (IPO) as it moves towards a mainboard listing that it hopes will speed up its business expansion.
Registering its prospectus with the authorities yesterday, Procurri announced an offer of 68.88 million shares - including 6.88 million shares for public subscription - at 56 cents apiece. This puts its market value at about $156.8 million.
The IPO aims to raise some $38.6 million, or $34.6 million in net proceeds. The offer will close at noon next Monday, with trading expected to start next Wednesday.
Procurri is a subsidiary of Catalist-listed DeClout, which is an incubator of tech firms. It has three major business pillars in the secondary segments of the data centre industry - the resale of excess or used data centre equipment, independent IT hardware maintenance services and the disposition of IT assets.
As the emergence of cloud computing speeds up the evolution and growth of data centre services, these segments command a huge but still fragmented market - ripe for Procurri to take a leadership position, chief executive Sean Murphy told reporters yesterday.
"The global (data centre) hardware market will be US$293 billion (S$396 billion) by 2020, and the maintenance market will be US$42 billion. Within this world, the hardware resale market will be at $34.8 billion and independent maintenance services market at US$4.4 billion by 2020," he said, citing forecasts by Frost & Sullivan.
However, he said no company has more than a 1 per cent share of the secondary market. Procurri, with offices in the United States and Britain and headquarters in Singapore, is poised to be the first mover.
"We are so far the only global platform that can connect corporate clients everywhere for their equipment needs while providing the independent maintenance services without the bias of the big manufacturers," Mr Murphy added. "Our Singapore listing gives us a strong brand name in the IT world."
The company's revenue shot up from $28.4 million in 2013 to $122.8 million last year, while net profit jumped from $2 million to $8.8 million in the same period.
Its services' gross profit contribution is about 34 per cent of total, but this is the "dream business" that Procurri wants to grow further to make use of its high profit margins of above 50 per cent, he said.
He added that a good part of the IPO proceeds will be used to acquire companies and capabilities on this front. Procurri has invested around $42 million in mergers and acquisitions since 2013.
The company does not have a dividend policy, but intends to recommend and distribute 25 per cent of its net profit for the financial years of this year and next year.
The listing will be the third mainboard IPO so far this year, following Manulife US Real Estate Investment Trust (Reit) and Frasers Logistics and Industrial Trust.
It also marks the first successful spin-off for DeClout, which will continue to own 46.5 per cent of Procurri after the IPO.
DeClout shares added half a cent or 2.27 per cent to 22.5 cents ahead of the IPO announcement.