Melbourne, Australia, 19 April 2018

Payroll and human capital specialist for Asia-Pacific region, PayGroup launches IPO to list on ASX

Highlights:
  • PayGroup provides Business Process Outsourcing (BPO) for payroll, benefits and Human Capital Management Services (HCM) catering to the unique multi-country needs for companies operating in the Asia-Pacific region
  • 11-year track record, servicing over 400 clients’ entities across 18 countries
  • Estimated annual dividend of 6% based on performance to 31 March 2018 (Pro-Forma EBITDA $2.7m)
  • BPO in the fast-moving market Asia-Pacific region is worth $20b, with significant growth opportunity – CAGR of 11%
  • Experienced Board and Management, including Ian Basser, former MD of Chandler McLeod as Chair

PayGroup Limited (PayGroup, the Group), a trusted provider of Multi-Country Payroll and Human Resource Outsourcing Solutions, is pleased to announce the opening of its Initial Public Offering (IPO) to raise between $5.5 million and $8.5 million.

PayGroup is the holding company for PayAsia, providing world class Business Process Outsourcing (BPO) and Cloud based Human Capital Management (HCM) software for medium to large multinational companies with employees spread across multiple countries.

Through the IPO, PayGroup will issue between 11 million and 15 million shares at $0.50 per share, with an expected market capitalisation of ~$22.8-25.8 million upon listing.

PayGroup is headquartered in Singapore. Its long list of prestigious clients include Appen (ASX:APX), Bossard (SWX: BOSN), Lexmark, Meindhardt, Shire (LON:SHP), Etika and World Vision. PayGroup is also a referral partner for US-listed global human capital management players, Cornerstone On-Demand (NASDAQ:CSOD) and Ultimate Software (NASDAQ:ULTI).

The company is forecasting revenue of $7.6m, an increase of 15% YOY, on a pro-forma basis, for FY18 and intends to pay a dividend. Most of its customers are on three-year contracts, with automated 12-month renewals, providing a verifiable indication of future revenue flow. PayGroup has also indicated pro-forma EBITDA for FY18 of $2.8m and NPAT of $2.6m.

The company was founded by current Managing Director, Mark Samlal who was raised and educated in Melbourne, and has more than 22 years industry experience, including Director of Automatic Data Processing (ADP) in Australia, one of the leading global players in outsourced payroll processing. In addition to Mr Samlal, the experienced board will also consist of Non-Executive Chairman, Ian Basser, who has over 28 years of global business experience. David Fagan, currently Non-Executive Director of Medibank Private, will join the board as Non-Executive Director, alongside Executive Director Franck Neron-Bancel who has over 21 years industry experience in global HCM and payroll services with global leader Automatic Data Processing, Inc. (NASDAQ:ADP).

PayGroup Managing Director, Mark Samlal said, “PayGroup is an established, proven and profitable business which provides investors with the opportunity to benefit from continued growth of multi-nationals entering Asia While leveraging the growing demand for human capital business processing outsourcing, both in the traditional service setting and the low-touch / self-service model for software-based solutions.

“Many companies and service providers under-estimate the complexity, time and cost of performing these crucial business functions across multiple countries in Asia. PayGroup’s brings the in-market knowledge – we’ve grown up in Asia – and that makes a big difference, it’s why we have succeeded.”

The Company is raising the funds with the assistance of lead manager, Lodge Corporate Pty Ltd, and has received strong support from institutional investors in Australia and Singapore. The offer is being conducted to allow PayGroup to target accelerated business growth through increased sales and marketing activities, including adding and establishing resources in the key selling markets of Melbourne, Sydney, Singapore, and Hong Kong. The Group will also establish a Sales Enablement division to manage strategic relationships with HCM and BPO leaders in the US and Europe. Funds raised will also be directed towards the Group’s technology platforms to increase efficiency and grow its capacity to service clients.

PayGroup has several channels for revenue growth, including marketing additional products to current clients, expanding the client base, partnership and alliance expansion, conversion of third party technologies to the Group’s cloud based platforms, treasury functions and near-term potential corporate payroll debit cards.

The offer is expected to close 10 May 2018, and PayGroup’s anticipated listing will occur on 28 May 2018, under the ticker code “PYG”. The prospectus is available via the IPO microsite at www.paygroupoffer.com.au.

For further information, please contact:

Mark Samlal
Managing Director
PayGroup Limited
mark.samlal@payasia.asia

Kyahn Williamson
WE Buchan
+61 3 8866 4722
kwilliamson@we-buchan.com

About PayAsia

PayAsia is a fully owned subsidiary of PayGroup. Headquartered in Melbourne, Australia, PayGroup Limited (ASX: PYG) was recently incorporated as the holding company for PayAsia (collectively PayGroup or Group). The Group is a provider of BPO solutions and Cloud (Software-as-a-Service or SaaS) based Human Capital Management (HCM) software, operating in the Asia Pacific region for multinational companies, and today services over 400 client entities with more than 31,000 client employees across 18 countries. The Group has 111 employees located across 8 countries. Clients are typically medium to large multinational companies with employees in multiple countries in the Asia Pacific region. The Group operates as a trusted partner to perform the outsourced payroll process for the client employees including banking, treasury, lodgement of statutory submissions including taxation, superannuation, pension, provident funds, and other social benefits. Beyond its BPO Payroll Services, the Group’s SaaS HCM software product suite supports clients in managing aspects of their employees’ life cycle, plus regional and mobile-enabled workflows for critical processes (such as employee and manager self-service, leave management and expense management).

http://www.payasia.asia