Hexmac - good things come in small packages!

Going public - primary offering update (Hexmac)

GoingPublic-Online, 26.09.00


Shares in the software producer for Internet infrastructure, Hexmac (WKN 522 761), can be subscribed between September 26 and 28 in a price range of 15 to 18 euros.

The initial listing on Germany's Neuer Markt is to be on October 2nd. The consortium comprises HypoVereinsbank (lead) and Delbr�ck & Co. Including the greenshoe, a total of 1.3 million shares, of which 1 million stem from a raise in share capital, will be issued. After the listing, the free float will amount to around 42% - after exercising the additional allocation option.

Hexmac, founded in 1993 has remained largely in the background, originally developing and marketing an editorial system for Internet sites. For example, the Hexmac Web publishing software is the basis for the Internet sites of Focus-Online, TV Today and Bild-Online. The technology platform has been developed constantly over recent years, so that the Hexmac product has grown into a document management and realtime messaging system with integrated e-business solutions. The company's head office is in Leonberg near Stuttgart and it has further sites in Hamburg, Munich and Kempten. In all, Hexmac currently employs 55 staff.

After the stock exchange listing, Hexmac plans to greatly extend its sales. By outsourcing much of its direct sales to partner companies, the share of licensing income is to rise from the current 50 % up to 70 %, while the share of income raised by the service division is to be reduced to 30 %. From 2001 onwards, other European markets such as Great Britain and the Scandinavian region are to concentrated on in addition to Germany. A further expansion into Asia and the United States is scheduled for 2001 to 2002.

The most comparable companies on the Neuer Markt are PiroNet and Gauss Interprise. From the point of view of the planned 2001 sales multiples, these have a similar valuation (PiroNet: 5.1; Gauss: 6.2) to that of Hexmac (KUV: 5.5) at the upper end of the book building range. The forecast sales for the coming 12 month period of around 10 million euros is to be doubled by 2002. Until this time, start-up losses of around 10 million euros will be incurred. A positive annual result is not expected until 2002 with 0.04 euros per share.

With a market capitalization of 55 million euros at the time of listing, Hexmac is one of the smallest companies on the Neuer Markt. A technology-leading software product, a comparatively high share of sales in licenses, and top-class reference customers make Hexmac a promising niche provider. Due to the large number of shares held by private investors amounting to more than 42 %, the Leonberger company could also become a takeover target. Although the reliability of the forecasts is still somewhat unsure, investors willing to take a risk should consider an engagement in this company, especially in view of the reasonable issue price.