OREANDA-NEWS. Blue Prism, a leader in Robotic Process Automation, supplying a Virtual Workforce powered by Software Robots, today announces the successful placing of 27,041,318 new and existing ordinary shares of one penny each ("Ordinary Shares") at 78 pence per share (the "Placing Price") with institutional and other investors to raise gross proceeds of ?21.1 million (the "Placing"). 

Following the Placing, Blue Prism will have 62,210,968 Ordinary Shares in issue all of which will be admitted to trading on AIM ("Admission"). It is expected that Admission will become effective and that dealings will commence in the Ordinary Shares on AIM at 8.00 a.m. on 18 March 2016. 

The market capitalisation of the Company at the Placing Price will be approximately ?48.5 million. 

Investec Bank plc ("Investec") is acting as Nominated Adviser, Sole Broker, Bookrunner and Underwriter to the Company. 

Key Highlights

·      A leader in RPA, supplying a Virtual Workforce powered by Software Robots that are trained to automate routine back-office clerical tasks

·      Operates in a highly attractive market place driven by an increasing adoption of RPA by large enterprises with significant back-office operations

·      Significant customer momentum, primarily through the Group's Channel Partner ecosystem, with 74 predominantly blue-chip customers

·      Entirely organic growth since inception with over 61 per cent. recurring revenues in the financial year ended 31 October 2015

·      Strong cash generation has funded organic growth to date

·      The Placing will raise gross proceeds of approximately ?21.1 million, of which ?10.0 million is for the benefit of the Group to underwrite its growth plans and provide balance sheet strength to contract with the Group's blue-chip customers and partners and approximately ?11.1 million is for the benefit of selling shareholders (the "Selling Shareholders")

·      Admission and the commencement of dealings expected to take place at 8.00 a.m. on 18 March 2016 under the AIM TIDM "PRSM" and with ISIN number GB00BYQ0HV16 

Alastair Bathgate, Chief Executive Officer of Blue Prism, commented: 

"We are delighted to announce our IPO and forthcoming Admission to AIM on 18 March 2016. This is an important step for Blue Prism as we increase the profile of the Group in line with the growing awareness of the RPA market. 

"We believe that the IPO will assist our next stage of growth, providing access to capital to fund our expansion plans as well as further incentivise our employees. In addition, the increased visibility over our business will help to improve the assurance and confidence our customers and partners place in Blue Prism. This is a very exciting time in the Group's evolution and we look forward with confidence to the next stage in Blue Prism's development."

Overview of the Group

The Group is a leader in RPA, supplying a Virtual Workforce powered by Software Robots that are trained to automate routine back-office clerical tasks. The Group's enterprise-grade software enables the automation of manual, rules-based, administrative processes to create a more agile, cost effective and accurate back-office. 

The Group launched a commercial version of its software product in 2008 and spent four years developing the software with a number of blue-chip customers, including Barclays Bank, Co-operative Banking Group, Telefonica O2, RWE npower and Shop Direct. These referenceable enterprise-scale deployments have demonstrated the compliance, resilience, repeatability, scalability and security of Blue Prism's software. The Directors believe that the completion of this industrialisation process has created a significant barrier to entry. 

The impact of robotics and computerisation is set to transform the labour market. A 2013 study by Oxford Martin School, University of Oxford, on the effects of computerisation on US jobs found that 47 per cent. were at a "high risk" of being replaced by technology with a further 19 per cent. at a "medium" risk.1 This analysis was echoed by the Chief Economist and Executive Director, Monetary Analysis & Statistics, of the Bank of England, Andrew Haldane, who commented in November 2015 that 15 million jobs in the UK could be at risk of automation.2 The impact of robotics on the workplace was the main theme of the 2016 World Economic Forum in Davos, which described the advent of economy-changing technologies such as RPA as "The Fourth Industrial Revolution".3 The Directors believe these commentaries are indicative of the potential market opportunity available to the Group. 

The Directors believe the Group's principal growth opportunity comes from an increasing adoption of RPA by large enterprises with significant back-office operations. As businesses have sought to reduce the cost base and improve the productivity of their back-offices, they have often turned to lower cost resourcing options. The Directors believe that the Group's Virtual Workforce is the next evolution in the labour market providing a third sourcing option (after onshore and offshore sourcing options) for businesses looking for the cost benefits of offshoring without the disadvantage often associated with it. In addition, RPA technology can enable large enterprises to better manage skilled labour shortages. Software Robots can be trained to complete the routine tasks previously performed by human agents enabling those employees to assume more strategic and creative roles within the organisation. RPA is therefore increasingly being viewed as an enabling technology in a workplace battling with skilled labour shortages. 

In order to take advantage of this market opportunity, the Group is increasingly focused on establishing a global Channel Partner ecosystem. The Group had 26 Channel Partners including Accenture, Deloitte, EY, IBM, id. Management, NEOOPS and Thoughtonomy as at 31 January 2016. 

The Group has experienced significant customer momentum, primarily through its Channel Partner ecosystem. In the financial year ended 31 October 2015, the Group won 25 new customers (of which 18 were Indirect Customers) taking its total customer base to 57 predominantly blue-chip customers across the UK, US and Europe. This momentum has continued into the current financial year and, as at 31 January 2016, the Group has won a further 2 Direct and 15 Indirect Customers. 

As at 31 October 2015, the Group had 43 employees based in offices in Newton-le-Willows and London (UK) and Miami (US). 

The Group has been entirely self-funded since 2008, prior to which it raised approximately ?1.7 million from a number of venture capital funds and high-net worth individuals. 

For the financial year ended 31 October 2015, the Group generated revenues of ?6.1 million (?4.5 million for the financial year ended 31 October 2014) and an EBITDA loss of ?0.7 million (?0.2 million for the financial year ended 31 October 2014). The Group had over 61 per cent. recurring revenues in the financial year ended 31 October 2015, and typical commercial arrangements with customers include three year term licences which are invoiced annually in advance. 

Current Trading 

The Group has continued the customer momentum shown in previous financial years with a significant number of Indirect Customer wins including one of the two largest Swiss banks as well as a number of Direct Customer wins in North America, including BNY Mellon. During the first quarter of the financial year ending 31 October 2016, the Group won 15 new Indirect Customers and two new Direct Customers and had a total of 74 customers, of which 49 were Indirect and 25 were Direct Customers respectively. The Group has also completed 11 upsells with existing customers during this period. 

The Group has continued to invest in sales and marketing and the market dynamics for the Group remain strong. Customer momentum has continued and across the Group's 26 Channel Partners, it currently has 200 leads in over 10 geographies. The Group is trading in line with the Board's current expectations and the Board is confident about the future prospects for the Group. 

Strategy 

The Group intends to continue focusing on accelerating its organic growth opportunities. This includes: 

Building a scalable sales and delivery channel

The Group intends to provide a scalable support infrastructure to its Channel Partners including further enhancing the automation of the Group's Channel Partner qualification and onboarding programme. The Group also intends to leverage its existing and growing Channel Partner infrastructure into new geographies and verticals

 

Increasing business with the Group's customers

A significant proportion of the Group's customers have become customers in the last two financial years. The Group aims to scale the number of Software Robot licences being used by these customers

 

Executing on the Group's US strategy

The Group intends to continue its strategic focus on the US market as the world's leading technology economy, win further reference sites as well as encouraging further Channel Partner sales activity

 

Exploiting the Group's market leadership to take advantage of RPA market adoption

The Group intends to maintain its premium branding and thought leadership position within the RPA market with product leadership through continued investment and development

 Reasons for Admission and use of proceeds 

The Directors believe that Admission will be an important step in Blue Prism's development as it will allow the Group to underwrite its growth plans and will enhance its profile and reputation within its market. 

The placing of the New Ordinary Shares on behalf of the Company will raise up to ?8.8 million (net of expenses). The Directors intend to invest approximately ?4.0 million of the net proceeds to underwrite the growth plans of the Group with the remaining amount being used to provide balance sheet strength to contract with the Group's blue-chip customers and partners. 

The Directors believe that Admission will also provide opportunities for the Group to attract, retain and incentivise employees through the Group's option schemes. 

The Existing Shareholders will also have the opportunity to realise some or all of their long-term investment in the Group through their participation in the Placing. In addition, the Placing will secure a more diverse shareholder base for the Group.