ICT-focused Telelink Business Services Group (TBS Group) will offer its up to 30% of shares on the Bulgarian Stock Exchange in two tranches. The first one will last from 27th Jan’20 to 31st Jan’20, and the second one will be held in the second half of Sep’20. ELANA Trading is the brokerage managing the offering.
The authorized maximum volume of the offering within Tranche 1 is up to 14% of the share capital of TBS Group, equivalent to 1 750 000 shares. The selling shareholders will offer 850 000 shares (7% of the Company’s share capital) on the first day and another 850 000 shares after the former batch is fully sold. All shares offered by the selling shareholders within Tranche 1 will be quoted at a price of BGN 7.60 per share.
The second Tranche of the offering will be held in the second half of September 2020, when the selling shareholders will be entitled to offer the unsold amount from Tranche 1 (if any) and another 2 000 000 shares (16% of the Company’s share capital). The minimum price at which shares will be offered during Tranche 2 will be equal to 8.5 times EBITDA per TBS Group share as of June 30 2020 (on a TTM basis), minus the amount of Net Debt per share as of the same date. In any case, the offered price shall not be lower than that of Tranche 1 – BGN 7.60.
Who is selling
The selling shareholders are majority owner Lyubomir Minchev (currently holding 83.65%) as well as seasoned investors Ivo Evgeniev (holding 6.175%) and Spas Shopov (holding 6.175%). All existing shareholders have signed a Lockup agreement outlining what shares all of them are allowed to sell by the end of 2020. Only three of the existing shareholders will take part in the offering and the number of shares on offer is not to exceed the fixed size by the end of 2020.
TBS Group FY2019 and dividend
Prelimnary financial reports 2019 showed the company generated BGN 110.1m in sales, down 5% y/y. The management disclosed that the latter was a result of slowdown in low-added-value product sales in the Western Balkans, yet management said that sales from this region are expected to recover, at the same time increasing their added value in 2020.
Profitability in FY2019, on the other hand, improved substantially with EBITDA reaching BGN 11.6m, up 18% y/y (EBITDA margin of 10.5%) and net income arriving to BGN 8.2m, up 7% y/y, (net income margin of 7.4%). The boost in profit was a result of growth in high-margin product and service sales in Bulgaria combined with higher sales in Western Europe and the US.
The Company also disclosed that it planned to distribute BGN 4m of its FY2019 net profit as dividend. This entails BGN 0.32 per share, yielding 4.21% at the IPO price of BGN 7.60.
In addition, TBS Group reported interest-bearing debt of BGN 6.4m and cash & cash equivalents of BGN 2.1m as at the end of Dec’19.