Connections Consult, a Romanian software producer specialised in business process automation founded in 2005 and a leader on the Romanian digital transformation market, went public on September 22, on the AeRO market of the Bucharest Stock Exchange (BVB).
“The listing of Connections Consult strengthens the sector of the IT and software companies on the Bucharest Stock Exchange, being the fourth company in this field to come to the capital market this year,” said Radu Hanga, president of the Bucharest Stock Exchange.
The company operates regionally, with offices in Romania, Bulgaria and Serbia.
Prior to the listing, Connections Consult carried out a private placement of shares, attracting RON10mn (€2mn) from capital market investors for the opening of a subsidiary in the US, investments in its own products and other companies in its field of activity.
After the €2mn private placement that valued the company at RON74.6mn in the summer, the shares of Connections Consult were listed at BVB at a price 11% lower.
In a risk-averse climate, with the US stock indices 3-4% below highs and imminent rate hikes, investors no longer showed the same bullish sentiment they showed in the case of previous listings on the Romanian alternative market AeRO, Profit.ro commented.
Listed on September 22, the shares of Connections Consulting ended up being traded at a lower price compared to the private placement concluded in mid-July. By noon, the company's shares dropped to RON61.0, 11.6% below the RON69.00 in the private placement. By the end of the first trading day, the price dropped to RON59.5.
At this price, the company's market capitalisation is RON64.3mn.
The price reflects growth expectations for the company, which already has a presence in Bulgaria and Serbia, but aims to expand internationally.
‘After 15 years of experience in technology and business process streamlining, marked by a constant growth in turnover and profit, we have every reason to be optimistic that, once we enter the stock market, our development plans, in the country and abroad, will be boosted and intensely supported by the newly listed company status," said Bogdan Florea, CEO and founder of Connections Consult.
"We are experiencing favourable times when businesses and society as a whole are taking accelerated steps towards digital transformation, and we are ready to seize these opportunities. The funding we have attracted from investors is helping us to expand into foreign markets, primarily targeting the North American market, in product development, in the area of specialised robots and the use of technology to promote green energy, as well as in the acquisition of matching companies. We also aim to expand our team of specialists, including at management level, and we hope that the capital market mechanisms, such as the Stock Options Plan, will help us to bring some of the best professionals in the market, both in Romania and in other countries."
Connections Consult recorded a turnover of RON32.3mn in 2020, an increase of 10.6% compared to 2019 (RON29.2mn). The largest share of revenue is generated by business process outsourcing services (RON22.7mn in 2020), followed by other service categories as IT infrastructure, software development and robot process automation (RPA).
The company's net profit in 2020 amounted to RON2.3mn, a 100% increase compared to 2019.
By the end of this year, the company expects a turnover of RON35.9mn and a net profit of RON2.6mn.