Global financial software giant Alfa has revealed plans to float on the UK stock market in June, in a move which could see the company valued at £800 million.
The firm is the force behind Alfa Systems, a leading, purpose-built software platform that is used by asset finance companies throughout the automotive and equipment finance market across the entire asset finance lifecycle.
This covers from proposal to end of lease, across a range of asset types and financing structures.
A number of major asset finance companies across the globe are customers, including Bank of America, Barclays, Mercedes-Benz and Nordea.
Andrew Denton, Alfa’s CEO, said the move would further raise the company’s international profile, drive global growth and turn it into a standard bearer for the asset finance software industry.
He said: “We are very excited about the next stage in the development of Alfa, and believe we have all the necessary attributes to succeed as a listed business.
“We have built long-term, trusted relationships with our customers and continue to help them address the challenges they face in an increasingly regulated and changing market.
“We have broadened our blue-chip customer base and worked closely with them to develop a world-class technology platform.
“The asset finance market offers us huge growth opportunities. We have a track record of strong returns and an IPO of Alfa will assist us in continuing the momentum of the business in the years ahead.”
Alfa benefits from an in-depth understanding of the asset finance industry and an established position of market leadership in the asset finance software market.
PwC reports suggest this market is expected to grow by around 40% to more than $1,465 million by the end of 2020.
Alfa directors believe the market is underserved due to a lack of purpose-built modern solutions, with many asset finance companies currently relying on legacy systems or non-specialist ERP systems.
It has already enjoyed strong growth in the past few years on the back of a thriving asset finance market.
Total global outstanding asset finance in 2015 was estimated by PwC at approximately $5.4 trillion, with $2.6 trillion of this relating to new business volumes, with US and European growth typically between 6-10%.
For the year ended December 31, 2016, revenues were up more than 30% to £73.3 million with earnings before interest and tax reaching £32.8 million, a year-on-year rise of more than 45%.
Andrew Page, executive chairman of Alfa and one of its founding directors, said: “Alfa has established itself as a world class technology company with a market leading position in asset finance, which is a substantial global market with many structural growth drivers.
“Many promising growth opportunities have been identified which Alfa is uniquely placed to capitalise upon going forward.”
Currently the company expects expansion to be delivered through organic growth, but Denton added that there is potential to accelerate this expansion with acquisitions should the right opportunities arise.
The company will focus on three pillars for growth, by maintaining its specialist focus on asset finance software, securing new customer wins while expanding demand among its current customer base and pursuing strategic initiatives that Alfa believes have the potential to accelerate its growth prospects.
Alfa was founded in 1990 and has its headquarters in London and now has more than 250 employees in 18 countries. It also has offices in Detroit, Los Angeles and Auckland.
The IPO will see at least 25% of the company made available through shares owned by CHP Software and Consulting, jointly owned by Denton and Page, which holds 94% of the issued share capital.
In addition to the benefits of accelerated expansion the move will bring, the IPO will deliver value to employee shareholders who own around 4% of the company.
Barclays Bank and Numis Securities are acting as joint global co-ordinators, joint sponsors and joint bookrunners, while N M Rothschild & Sons is acting as financial adviser.
Full details of the offer will be included in the prospectus, expected to be published in the next few weeks.