Inside goes public
The initial size of the offering is approximately EUR 60 million through the issuance of new shares, with an extension clause for EUR 9 million, and an over-allotment option to approximately EUR 10.3 million. The offering could represent up to 32.85% of the share capital and voting rights of Inside Secure (following the share capital increase and the exercise in their entirety of the extension clause and of the over-allotment option). The indicative offering price range applicable to the offering is between EUR 7 and EUR 8.54 per share.
Inside says that the closing of the public offering expected on February 16, 2012 at 5:00pm (Paris time) for subscription requests made at retail banks and at 8:00pm (Paris time) for subscription requests made through Internet. Closing of the offering outside France is expected on February 17, 2012 at noon (Paris time). Start of trading is expected on February 20, 2012
The objective of the IPO, as announced by Inside is to support the company’s organic growth, and in particular its research and development expenses, and, potentially, to finance potential targeted acquisitions of technologies and/or businesses.
Inside Secure is positioned on two main axis: contactless and security. The activity is organized along three segments:
- Mobile NFC, the most visible part of the company, where Inside focuses on its complete offer, including NFC chips, secure elements, and software stack,
- Digital security, mainly activities acquired from Atmel in 2010, cf. SIW #10-18)
- Secure payment (chips for contactless payment cards)
According to Inside, which supports data published recently by IMS Research (cf. Smart Insights Weekly #12-02), there has been over 35 million NFC ships delivered in 2011, and Inside announced it has delivered its 20 millionth NFC chip end in January 2012. Also the momentum for NFC adoption is building in 2011-2012, with the involvement of big names such as Google, Intel, RIM, MasterCard, Visa, etc. Shipments of NFC handsets have grown from 3 million in 2010 to 35 million in 2012, according to IMS Research.
Inside is ready for more innovation: Remy de Tonnac, showed the NFC Booster, a solution integrating all NFC functions in the dimensions of a SIM card, dedicated to legacy handsets (cf. SWI #11-47), which had already been demonstrated during Cartes 2011. The NFC Booster is also to be available in microSD format. Inside works in close collaboration on NFC projects with RIM, Intel, Oberthur, Gemalto, ZTE and Sonim. The company also announced (cf. Convergence section) it has been selected by a major handset vendor for its NFC offer.
The partnership with Intel is especially seen by Inside as a major recognition, and as the opening of NFC technology beyond the handset, as Intel has already shown an Ultrabook equipped with NFC (cf. SIW #12-03).
Inside digital security segment includes activities such as pay TV, access control, M2M, secure data storage, and tags. Inside has established strong potions in the Pay TV market, and has set up partnerships with WISeKey (cf. SIW #12-03) on brand protection and with Freescale (cf. SIW #12-05) on smart meters and identity of machines.
Secure payment is the third segment, and also represents fuel for growth. Inside claims to have over 75% of the contactless card market since 2005. Thanks to recent announcements both by Visa and MasterCard, the US are evolving towards dual interface cards, with a deadline set in 2013. As a consequence, Remy de Tonnac anticipates a low demand in 2012 and a huge growth in 2013. United States represent roughly a third of the world market of payment cards.
Remy de Tonnac, Chief Executive Officer of Inside Secure, mentioned the company owns over 500 patents, and has less than 400 employees. “I know very few companies that can enjoy the same ratio”, he added. 55% of Inside employees work in R&D.
Along with its IPO, Inside reveals more details about its business and results.
Company sales reached US$ 151.5 million (EUR 115.2 million) in 2011, representing a 54% CAGR (Compound Annual Growth Rate) between 2005 and 2011. Without external growth, the CAGR is 34%. In Q4/2011, mobile NFC accounted for 52% of Inside sales, Digital Security for 33%, and secure payment (chips for contactless payment cards) for 15%.
Inside Secure discloses its results for the last years:
The company has chosen not to communicate on short-term forecasts but anticipates revenue of US$ 400 million (EUR 304 million) in 2014, with a 40% gross margin ratio.