Bnp Paribas Ace Manager Challenge

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INITIAL
 PUBLIC
 OFFERING
  OF
 GTI
 
ACE Manager Challenge Petteri Häjänen Berben Jordy Jorien van den Bergh

Agenda
Why is an IPO the right thing for GTI? How does an IPO work? Advantages and disadvantages of an IPO Financial details Execution strategy: how to attract which investors? Conclusion

Why is this the right time?
Company readiness
•  Cash injection of 40m aces needed for growth in the next three years •  Impressive growth prospects will attract investors

Market readiness
•  IPO activity is recovering after the financial crisis •  Capital raised in Oct/Nov 2009 quarter was highest since 2004, and trend is expected to continue

Industry readiness
•  Tech companies have a recent history of successful IPO’s

How does an IPO work?
Potential investors

GTI Underwriter (BNP Paribas)

Advantages

Capital access Free trade in shares: higher liquidity Incentive for good corporate governance Higher credibility

Lose part of ownership and control of the company Extensive reporting and regulation compliance Higher pressure on management Expense of IPO

Disadvantages

Company valuation
Industry Apparel Computer software Biotechnology Internet software and services GTI Price to book value 2.28 3.91 3.9 4.27 Return on equity 4.16% 11.04% 5.05% 5.72% 16.83%

Book value GTI 59,906,336

Company value (x 3.91) 234,233,774

Ownership
•  Introduce 1,000,000 new shares •  Based on company valuation, we need to sell 220,000

shares to raise 50m aces

Owner John Mackenzie Employees Investors

Number of shares 1,680,000 100,000 220,000

Ownership 84% 5% 11%

Execution strategy
1 2 3
•  Target institutional investors •  Easier to reach •  Interested and knowledgeable investors •  Technology-related but not as risky

•  Build confidence among investors •  Assure commitment of CEO •  Show elaborate business plan •  Show proof of past results and expected future growth

•  Building a final prospectus • ...
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