BMIT Technologies plc - Upcoming IPO

Monday, November 19th, 2018

Further to the company announcement issued by GO plc dated 3 October 2018 informing the market of its intention of disposing of up to 49% of its shareholding in its wholly-owned subsidiary BMIT Technologies plc (“BMIT”), GO had also issued an Explanatory Circular and BMIT also published a slideshow regarding the upcoming initial public offering.

BMIT is a leading IT services provider in Malta. It is primarily focused on the provision of data centre, cloud and managed IT services, offering an extensive range of services and solutions to a wide range of business customers. Further information about BMIT and its wholly-owned subsidiary company Kinetix IT Solutions Limited are available from the following websites http://www.bmit.com.mt/ and http://www.kinetix.com.mt/home as well as from the downloads below.

Offer Price:

€0.49 per share

Amount on Offer:

A minimum of 25% of the total issued share capital (equivalent to circa 50.9 million shares) and up to a maximum of 49% (equivalent to circa 99.8 million shares)

Reasons for the Offer:

The reasons for the partial sale of BMIT by GO are:

i)             To allow GO and BMIT to pursue their own distinctive specialisations, corporate strategies and funding requirements. This could result in enhanced operational performances for both companies.

ii)            To raise the profile of BMIT, thus increasing its ability to recruit, motivate and retain key personnel.

iii)           To give the opportunity to GO to crystallise part of the profits made in its investment in BMIT over the years in a tax efficient manner. Through the IPO, GO is also expected to raise significant amounts of cash aimed for dividend distribution to shareholders as well as accelerate its ambitious capital investment programme in Malta whilst maintaining a lean balance sheet for any eventual consolidation opportunities in the telecoms sector in Cyprus.

Conditions of Listing:

The successful completion of the proposed IPO is dependent on the realisation of the following conditions:

i)             Approval by shareholders of GO during the Extraordinary General Meeting scheduled for 3 December 2018;

ii)            Regulatory approval for the admission to listing on the Official List of the MSE of the shares of BMIT;

iii)           Listing of the shares of BMIT; and

iv)          a minimum of 25% of the total issued share capital of BMIT Technologies is taken up at the IPO.

Dividend Policy:

BMIT intends to maintain an aggressive dividend pay-out ratio, with dividend distributions paid on annual basis and expected to amount up to 90% of the company’s free cash flow but not exceeding 95% of distributable profits. The first dividend (estimated at a net yield of 4.4%) will be subject to shareholders’ approval during the Annual General Meeting that is expected to take place in or around May 2020 in respect of the 2019 financial year.

Disclaimer:

The value of investments may increase as well as decrease and past performance is not an indication of future performance. Like any investment, investing in the shares of BMIT carries a number of risks, a detailed explanation of which will be provided in the Prospectus that will be issued as part of the IPO in due course. Prospective investors are encouraged to refer to and consider the “Risk Factors” contained in the Prospectus once this is published.

Downloads:

GO plc – Explanatory Circular dated 1 November 2018

BMIT Technologies plc – 2018 Slide Show

The upcoming IPO of BMIT Technologies – Financial Article by Edward Rizzo

A copy of our investment research report containing our analysis and opinion on this equity initial public offering will be shortly available through our fee-based Research Portal. Should you be interested in subscribing to our Research Portal, kindly send us an email on researchportal@rizzofarrugia.com to obtain a copy of the Subscription Agreement containing our ‘Terms of Use’.

This webpage has been prepared based on the Explanatory Circular published by GO plc dated 1 November 2018 and no representations or guarantees are made by Rizzo, Farrugia & Co. (Stockbrokers) Ltd with respect to the accuracy of the data. This webpage is for information purposes only. It is not intended to be and should not be construed as an offer or solicitation to acquire or dispose of any of the securities or issues mentioned herein. Rizzo, Farrugia & Co. (Stockbrokers) Ltd accepts no responsibility or liability whatsoever for any expense, loss or damages arising out of, or in any way connected with, the use of all or any part of this webpage.

Rizzo, Farrugia & Co. (Stockbrokers) Ltd is acting as Sponsor and Co-Manager to BMIT Technologies plc.

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