REG - Fadel Partners Inc. - Admission to AIM and First Day of Dealings
06/04/2023 08:15
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RNS Number : 5530V Fadel Partners Inc. 06 April 2023
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW
ZEALAND OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE SUCH
RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.
DEFINED TERMS ARE AS STATED IN THE COMPANY'S ADMISSION DOCUMENT DATED 2 APRIL
2023 (THE "ADMISSION DOCUMENT").
6 April 2023
Fadel Partners, Inc.
('FADEL', the 'Company' and, together with its subsidiaries, the 'Group')
Admission to AIM and First Day of Dealings
Fadel Partners, Inc. (AIM: FADL), a leading brand compliance and rights and
royalty management software provider, is pleased to announce the admission of
its entire issued share capital to trading on AIM, a market operated by the
London Stock Exchange plc ("Admission").
Admission will take place, and dealings in the Company's depositary interests
over common shares of $0.001 ("Common Shares") will commence, at 8.00 a.m.
today under the ticker 'FADL'.
Founded in 2003 by Tarek Fadel (Chief Executive Officer) and headquartered in
New York (United States), FADEL has since grown to a team of 116 full time
employees, plus an additional pool of c.50-60 contractors. FADEL is a leading
developer of cloud-based brand compliance and rights and royalty management
software, working with some of the world's leading licensors and licensee
across media, entertainment, publishing, consumer brands and hi-tech/gaming
companies.
FADEL has two solutions, being IPM Suite (rights and royalty management for
publishers and licensing) and Brand Vision (an integrated platform for brand
compliance & monitoring that includes content services, digital rights
management, AI-powered content tracking, a brand monitor, and 100 million
ready-to-license images). The use of FADEL's products spans across marketers
and advertisers to accelerate campaign creation, eliminate content misuse and
maximise asset reuse; finance teams to generate and precisely manage royalty
calculations, statements and audit reports; and licensing professionals to
identify licensing violations, optimise revenue and avoid over/under royalty
payments.
Key Highlights:
· Based on the Placing Price of 144p, the market capitalisation of the Company
will be approximately £28.8 million at Admission
· In connection with Admission, gross proceeds of £8.0 million were raised by
way of the Placing and the Fadel Loan
· finnCap Ltd is Nominated Adviser and Broker in relation to the Placing and
Admission
· Following Admission, the Company will have 19,968,003 Common Shares in issue
· The Company's ISIN is USU3033R1024 and its SEDOL is BN6NDF9
Use of Proceeds:
The Directors believe that the Group's solutions are scalable and help address
some of the challenges companies face as a result of digital transformation,
growing amounts of content and IP and complex licensing arrangements.
Therefore, the Directors believe that the Group is well positioned to
capitalize on fundamental market growth and pursue its growth strategy of
selling into new and existing geographies, growing existing industries,
entering new industries and evolving its products to meet customer needs.
The gross proceeds of the Placing of the New Shares and Fadel Loan will be
used by the Company to:
· Invest in sales to proactively sell its solutions into a growing market
(US/European sales expansion through direct sales, partnerships and
distribution arrangements);
· Investment into marketing (leads, ads and webinars);
· Conduct R&D to continue to innovate and develop its products to enhance
its existing offering and address its customer and potential customer needs;
· Reinforce growth (support and services team to complement the sales team
effort); and
· Provide general working capital, including the advisory costs and other
expenses of the Placing and Admission.
Tarek Fadel, Chief Executive Officer, commented:
"We are delighted to announce our admission to trading on AIM.
"FADEL has already established itself as a leader in its field, delivering
solutions to companies across numerous sectors and geographies. The successful
completion of our IPO represents the beginning of a new chapter and this
investment will allow us to expedite our growth strategy to scale alongside
the rapidly expanding digital content and IP market and to capitalise on the
significant opportunity available to us.
"We believe that AIM is a natural fit for FADEL as it has a proven track
record for helping technology companies achieve their growth ambitions.
"I am delighted to welcome our new shareholders and would like to thank them
for their support. We look forward to working with them in the years ahead as
we build on our strong foundations and push forward with our growth plans.
"We expect to announce our results for the 12 months ended 31 December 2022 in
early June 2023 and look forward to seeing our investors at that time."
Key Investment Case Highlights
· Innovative, scalable technology offering with a strong track record - FADEL's
award-winning enterprise-ready cloud software provides solutions for content
and IP creators (licensors) and content and IP users (licensees). Its system
is built on a highly scalable architecture. Its customers have complex needs,
with the IPM software helping, inter alia, to manage and process complex
contracts and licensing requirements and Brand Vision helping
marketers/licensees to accelerate their digital strategy to allow them to
manage, inter alia, large volumes of content and associated usage rights.
· Blue chip and loyal customer base - The Group has a blue-chip customer base,
with customers such as Pearson, L'Oréal, Hachette Livre and Marvel
Entertainment. Its customers include some of the largest licensors who drive
significant licensing revenue as well as three of the "big five" French
publishers. Through IPM Suite, FADEL's larger customers have achieved
significant ROI from cost efficiencies and licensing revenue growth
opportunities not available using legacy solutions. As a result, the Group has
reported exceptionally low churn in customers using IPM Suite following the
implementation phase, to date.
· Established sales and marketing strategy - The Group has an established direct
and indirect sales strategy. The Group has salespersons in the US, UK and
France. Indirect sales are through the Group's established partnership and
reseller arrangements. In respect of marketing, FADEL is considered as a
thought-leader in its field - representatives from the Company regularly
attend leadership events and are active research contributors and its
employees sit on relevant industry boards, such as the BISG. These marketing
efforts contribute to general market awareness of FADEL and its solutions.
· Strategically positioned to capture market growth - There is fundamental
growth in digital content and IP (across industries, geographies and channels)
and therefore a growing requirement for solutions to manage this digital
content and IP. In the rights and royalty ecosystem (which IPM Suite
addresses), a significant proportion of companies are still using more
traditional spreadsheet-based methods of managing licenses and royalty
calculations, typically using large teams and sometimes legacy royalty systems
that are no longer 'fit for purpose'. The digital brand compliance marketplace
(which Brand Vision addresses) is still relatively nascent and highly
fragmented, with a vast number of large brands bringing their content creation
and digital agency function in-house. As companies implement digital
transformation strategies, the ROI on an enterprise solution like FADEL is
becoming more apparent.
· Established low-cost but highly skilled offshore R&D and delivery centre
in Lebanon - The Group has operated its own offshore R&D and delivery
centre in Beirut, Lebanon since 2006. In doing so, the Group benefits from the
high level of education in that country, including Engineering and Business
majors, the multi-lingual capabilities of the employees and low cost and low
attrition attained by operating in Lebanon. This has proven to be a strategic
competitive differentiator for the Company allowing it to expand its product
and service offerings while maintaining high customer satisfaction at low
operating costs.
· Highly experienced and well-connected Board -The FADEL Board, both Executive
and Non-Executive, is constituted of prominent and experienced figures in the
industry including founder and CEO Tarek Fadel and CFO Vicary Gibbs. The FADEL
Board has collective experience in high growth software environments,
alongside strong industry relations. The Directors believe that this will
enable FADEL to pursue its growth strategy and ensure strong origination for
new opportunities. Additionally, between them the Board has public market
experience of both AIM and other exchanges.
· Strong financial record with scalable revenue model - In the twelve-month
period ended 31 December 2021, FADEL generated revenue of $12.0 million (31
December 2020: $7.8 million) of which 54 per cent. was recurring. Year-on-year
revenue growth was 53 per cent, with a two-year CAGR of 50 per cent. In the
six-month period ended 30 June 2022, FADEL generated revenue of $6.7 million,
of which 62 per cent. was recurring. At the core of the revenue model is a
SaaS platform generating subscription revenue. IPM Suite, which sits as the
foundation of the business, typically has large contract values of which a
significant amount is related to services, whilst the service revenue is
non-recurring in nature, the integration complexity results in defensive
revenue. Brand Vision, which has grown out of the acquisition of IDS in FY 21
has diversified our product revenue. Going forward, the Company expects to see
a higher proportion of subscription revenue coming from Brand Vision, where
its products can be deployed quickly with limited integration requirements and
lower implementation costs. The Directors believe that the Company has a
defensible revenue with significant upside potential.
· Strong current trading - Revenue for the six month period from 30 June 2022
was $6.5 million(1), resulting in expected revenue for FY 22 of $13.1
million(1) (unaudited management information). This was a 10.1 per cent.
year-on-year increase (FY 21: $12.0 million), notwithstanding foreign exchange
headwinds the global economic environment. In respect of recurring revenue,
there was 34 per cent. year-on-year growth (Subscription and support: $8.7
million, unaudited, FY 21: $6.5 million) with a significant contribution from
subscription sales in Brand Vision, including a full financial year's
contribution from IDS.
· A clear growth strategy - The Group intends to use the proceeds to pursue its
organic growth strategy to expand its business and the breadth of its
operations, hire additional employees, expand into new markets, further invest
in research and development and sales and marketing, and incur costs
associated with general administration (including expenses related to being a
listed company).
For further information please contact:
Fadel Partners Inc.
Tarek Fadel, Chief Executive Officer Via Alma PR
Vicary Gibbs, Chief Financial Officer
finnCap Ltd (Nomad & Broker) Tel: +44 (0)20 7220 0500
Jonny-Franklin Adams
Emily Watts
Abigail Kelly
Milesh Hindocha
Alma PR Tel: +44(0)20 3405 0205
Josh Royston fadel@almapr.co.uk
Andy Bryant
Matthew Young
About FADEL Partners Inc.
FADEL is a leading developer of cloud based brand compliance and rights and
royalty management software, working with some of the world's leading
licensors and licensees across media, entertainment, publishing, consumer
brands and hi-tech/gaming companies. The Group combines the power of rights
management and content compliance with sophisticated content services,
AI-powered visual search and image and video recognition.
FADEL has two solutions, being IPM Suite (rights and royalty management for
publishers and licensing) and Brand Vision (an integrated platform for Brand
Compliance & Monitoring that includes Content Services, Digital Rights
Management, AI-Powered Content Tracking, a Brand Monitor, and 100 million
Ready-to-License Images).
The Group's main country of operation is the United States, where it is
headquartered in New York, with further operations in the UK, Lebanon, France,
Canada and India.
For more information please visit the Group's website at: www.fadel.com
(http://www.fadel.com) .
This announcement is not for publication or distribution, directly or
indirectly, in or into the United States of America. This announcement is not
an offer of securities for sale into the United States. The securities
referred to herein have not been and will not be registered under the U.S.
Securities Act of 1933, as amended, and may not be offered or sold in the
United States, except pursuant to an applicable exemption from registration.
No public offering of securities is being made in the United States.
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