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FrontOffice Nordic AB (publ.)

English | Swedish

Applied for listing on NGM Nordic MTF! Allocation still possible!

We are disrupting the market for company reconstructions. We have saved more than 82 companies and 1 018 jobs since we started three years ago. Join us in our mission to save companies and make them profitable!

INTRODUCTION

FrontOffice Nordic AB has applied for listing on NGM Nordic MTF. Read more. Allocation of shares is still possible even if the FBM-campaign is fully subscribed.

FrontOffice Nordic AB (publ) was founded as a response to how reconstructions traditionally were handled by law firms. The process was often unnecessarily expensive and failed to address the core of the problem – why and how the financial problems arose in the first place. FrontOffice found that legal advice alone would not be sufficient to solve problems, which to a large extent are financial or managerial in nature. A combination of skills and experience in entrepreneurship, finance, law, marketing, and sales are often required to successfully turn around a company in financial distress.

In the past three years alone more than 85 of FrontOffice's approximately 130 reconstructions have been successful. This has helped save over 1 000 jobs. Our success rate is significantly higher than that of any of our competitors; 65 percent of our reconstructions are successful compared to the industry standard of 18 percent (according to UC, 2013-06-10).

We are growing fast. In three years, the staff at FrontOffice has grown from two to 14. Of the current staff, eleven are full time employees and three are consultants. The majority of our staff have a background as entrepreneurs and/or are experienced in insolvency law. Our aim is to become the leading turnaround consultancy in the Nordics.

Every year about 6 500 companies in Sweden file for bankruptcy. This amounts to about 15 000 lost jobs. A significant share of these companies could be saved from bankruptcy through a reconstruction. Our research indicates that 20 000 companies a year potentially could benefit from a reconstruction.

EXECUTIVE SUMMARY

  • FrontOffice is the parent company in a corporate group specialized in turnarounds. Svensk Företagsrekonstruktion AB is the turnaround consultancy.

  • FrontOffice has developed a technical platform to identify potential clients at an early stage. This platform is called KROSS. Identification often occurs before the companies themselves realize the severity of their situation.

  • FrontOffice's ability to reach out to potential clients before it is too late is a key factor in both our strong ability to acquire clients and our high success rate (65 % compared to industry standard of 18 %).

  • FrontOffice's competitors are mostly law firms. Law firms lack the ability to advertise freely which has opened up a significant market opportunity for us.

  • FrontOffice is proud to have Rolf Åbjörnsson, renowned insolvency attorney, as a member of its board of directors. Mr Åbjörnsson has been a partner and co-founder of several large law firms and has acted as a trustee in some of Sweden’s largest bankruptcies.

  • FrontOffice will use the proceeds from the share issue to continue development of KROSS, recruit personnel and to market its services, enabling even faster growth.

  • Expected profit of 1 MSEK 2015, and 3 - 4 MSEK 2016.

  • FrontOffice will launch an independently operated investment fund. The fund will invest in companies which show significant potential for growth and profitability.

GROUP STRUCTURE

THE OFFER

  • Subscription price: SEK 2.50 per share
  • Subscription period: November 25 2015 - 15 January 2016
  • Amount offered B shares: 2 000 000
  • Capital raised: 5.0 MSEK
  • Valuation, pre money: 27.5 MSEK

Investors receiving allocation of shares, without preferential rights, will be given notification through an allocation statement. Payment must be made within three (3) business days after the allocation statement has been received.

The information and the terms for the rights issue, as set forth in the memorandum, should be the basis for your assessment to invest in FrontOffice. The information provided through this text on FundedByMe is not part of the memorandum. The memorandum has been uploaded and is available for download on FundedByMe. In order to gain access to the memorandum and to participate in this investment, we kindly ask you to sign in or become a member of FundedByMe.

PURPOSE OF THE ISSUE - IPO Q1 2016

The board of directors has the ambition to list the company's shares for trading during the first quarter of 2016. FrontOffice launches this financing round through FundedByMe in order to ensure the following:

  • Economic strength - FrontOffice forecasts indicate a profit of over 1 Mkr for 2015 and 3-4 Mkr for 2016. We continuously invest in growth. With greater financial muscle, we can increase the growth rate substantially.

  • Diversification of ownership - a well diversified ownership is a prerequisite in order for the trading in the company's shares to be liquid. To allow for a greater diversification of ownership, current major shareholders have decided to waive their preferential rights. However, the major shareholders have undertaken to subscribe for shares not subscribed for by the general public.

Financial forecast

Financial information

  • 2013 - Turnover: 2,8 MSEK Loss: -0,19 MSEK
  • 2014 - Turnover: 9,4 MSEK Loss: −0,05 MSEK
  • 2015-01-01 until 2015-09-30 - Turnover: 8,0 MSEK Profit: 0,7 MSEK

Financial forecast

  • 2015 - Turnover: 10,5 MSEK Profit: 1 MSEK
  • 2016 - Turnover: 19 MSEK Profit: 3,5 MSEK
  • 2017 - Turnover: 27 MSEK Profit: 6,5 MSEK

HOW THE INVESTED CAPITAL WILL BE USED

The invested capital of 5 MSEK will be used as follows:

  • Marketing - 1 500 000
  • Working capital and recruitments - 2 000 000
  • Development of software - 1 000 000
  • Issuing costs - 500 000

SWEDISH INVESTMENT DEDUCTION

On December 1, 2013, the Swedish government introduced a new legislation on deduction for investors. The deduction is granted for acquisition of shares in small companies, either in connection with the formation of a company or in connection with a new issue. The investment deduction may be granted with half of the cash payment for the shares, with a maximum deduction of 650 000 SEK per person and year, corresponding to an investment of 1.3 MSEK. In practice the tax deduction amounts to 15 per cent of the invested capital. If the shares are sold within five years after the acquisition the deduction is reversed to taxation. The investment deduction is applicable for investments in FrontOffice by natural persons who are liable for tax in Sweden.

For further information we refer to the Swedish Tax Agency’s website: www.skatteverket.se/privat/skatter/vardepapper/investeraravdrag.4.10cbb69314111c2d94ba38b.html

THE BUSINESS MODEL

We work with clients in financial distress. We help our clients negotiate a debt write-down as part of the process. This makes it possible for the client to pay us for our servies. The clients also receive additional liquidity as the government's wage garantee fund finances the employee's wages during the initial phase of the reconstruction. Our clients also experience relief through an automatic stay of payments as the reconstruction commences. All in all, this means a substantial improvement of the client's liquidity position.

Our main purpose is to save our clients' companies. Therefore, we have developed an efficient model to manage the reconstruction process, enabling us to offer fixed pricing for our services in most cases. This removes uncertainty for the client and makes the budgeting process predictable. Most of our competitors bill by the hour, which creates a high degree of uncertainty when estimating the total cost for the reconstruction process. Thus, our solution is well adapted to the needs of our target market.

By offering highly competent consultants, we find solutions to the various problems experienced by our clients allowing turnarounds. This means that we focus on correcting the source of the problem instead of the symptoms, in contrast to our competitors who, in our opinion, often focus mainly on the debt write-down. Our consultancy model consists of providing advice within entrepreneurship, finance, law, marketing and sales. In addition, we often help our clients find financing for their operations.

Our efficient process, providing relevant advice, results in a much higher success rate. This leads to higher payouts to creditors, since bankruptcy can be avoided. Thus, our model benefits all stakeholders in the process.

KEY SUCCESS FACTORS

FrontOffice's technical platform, KROSS, enables us to identify potential clients at an early stage. The identification often occurs before the companies themselves realize the severity of their situation. The platform uses various data sources to identify a series of risk factors, analyzes the data and provides information on potential clients in various stages of need. The ability to reach out to potential clients before it is too late is a key factor in both our strong ability to acquire clients and our high success rate (65 % compared to industry standard of 18 %).

The problems our clients experience are often financial, managerial or operational in nature. Most of our competitors are law firms, however, legal problems are rarerly the main issue. Therefore, FrontOffice provides its clients with an appropriate and diversified skill set, including entrepreneurship, finance, law, marketing and sales.

FrontOffice will launch an independently operated investment fund. The fund will, under the right circumstances, be able to provide companies with financing both during and after a reconstruction. It will generate revenue from interest payments on loans and from equity investments in companies that have been successfully reconstructed.

TESTIMONIALS