Sirma Group Holding (BSE: SKK) announced its first investments after the successful initial public offering (IPO) on the Bulgarian Stock Exchange.The company managed to raise 11.4 million Leva new capital at the end of last year, after listing on the BSE. Sirma’s IPO is considered as the largest in Bulgaria since the financial crisis in 2007.
“The Board of Directors of Sirma Group approved a list of first investment projects, which will be financed with raised funds. According to the IPO Prospectus, a new entity -Sirma Group Inc., was established and structured in the US with capital of $ 2 million. The company is expected to be a key driver and to develop the lucrative US market selling Sirma products and services. Its priority will be to boost sales for the daughter companies there, and strengthen the synergies between them, “said Tsvetan Alexiev, CEO of Sirma Group Holding.
Sirma Group Inc. is based in New York, and is managed by Board of Directors, presented by Tsvetan Alexiev, Yavor Djonev and Atanas Kiryakov. Tsvetan Alexiev is the Chairman of the Board and Yavor Djonev is a CEO, both are in charge of company operations, as the former will additionally supervise financial affairs of the company. Mr. Djonev has extensive international experience, he is one of Sirma founders, since its establishment.
The managing board requires the newly established company to primarily focus on increasing sales volumes in the USA and nearby regions, and actively seeking markets and niches relevant to group company’s verticals. This goal has to be achieved by building a strong sales and BD team, allowing company to confidently enter the East Coast of the United States.
Ambitious agenda is set to boost sales of the key players in Sirma Group – Sirma Solutions, EngView Systems, Ontotext and Sirma ITT, which are expected to enlarge their positions on the existing market. The companies have a significant client portfolio in the region – for instance the National Gallery of US, the Ministry of Defense, US Ministry of Healthcare, John Wiley & Sons (leading publisher of scientific literature), Quality Vision International (a global leader in video measurement equipment), the Central Election Commission – Canada, Ministry of Natural Resources – Canada. Operations in Western states will be taken over from Sirma’s current office in Idaho, with MD Dejan Nenov.
Other Sirma investments outside USA will be: increasing of production capacity of Sirma Solutions in HQ in Sofia and regional offices, as well as spinning-off Loyax from Sirma Solutions as an independent company. The new entity will be further developing its own loyalty platform Loyax, and additionally will offer loyalty programs management and strategic consultancy in the field. Loyax division has already built a partnership network in different countries in Europe, Asia, Africa, Middle East and Latin America. The platform is licensed for marketing agencies in Singapore, Nigeria, Qatar and Guadeloupe. It is suitable for small and medium-sized businesses, helping them to build their loyalty strategies and programs. Owing to the joint efforts of Loyax team and the partner’s network, the platform has been implemented in several shopping centres, casinos and retail chains. Loyax unit has been separated into a distinct company, and staffed with highly skilled developers and experienced marketing professionals, which role is paramount to the project success. The total investment in Sirma Solutions accounts of 1 million Leva, and half of them are granted for Loyax platform.
“There are many short-scale investments that were planned to accelerate growth and capacity of the current teams, in order to seize each opportunity to take on new business and speed up existing one, according to Sirma’s business plan,” added Mr. Alexiev.
The Holding will fund Sirma ITT with 500,000 Leva additionally. The company has successfully implemented and deployed its intelligent document and process management system in several institutions and corporations in the United States. Sirma Group is currently scheduled an acquisition pitch for companies, which businesses are complementary to the verticals we operate. These activities will be funded from the IPOs gained cash.
The company has recently announced its consolidated results for Q4 2015, and accounts an organic growth in revenues of 17.4% from 27.048 to 31.759 million Leva. The IPO raised funds will be invested during 2016. The company commented their results for 2015 – the performance is better than expected, in comparison to these presented before IPOs investors. The last year was a starting point of many investments, which reduced the operating profit for 2015 vs 2014, but it is expected to pay-off and make a significant difference this year.