Category: independent research on IPOs
Mimecast: Keeping Corporate Email Safe from Attack
Founded in 2003 by Peter Bauer, currently CEO and Chairman, and Neil Murray, currently Chief Technology Officer, and based in London, the UK, Mimecast (NASDAQ: MIME) is a leader in cloud-based email management, including data security and archiving. The company serves over 18,000 customers in a broad range of industries, and added 1,800 new customers in the recently concluded March 31 quarter. Consensus estimates call for revenue of $173 million in fiscal year 2017 (ending March 31), which implies a 22 percent increase over the prior year, while EPS estimates suggest a loss of $0.05 per share, which would compare to a loss of $0.07 in FY’2016.
Mimecast debuted on the NASDAQ on November 19, 2015 in a 7.8 million share IPO priced at $10 per share that enabled the company to raise about $70 million. The deal was led by Goldman Sachs, Barclays Capital, Jeffries, RBC Capital Markets, and Oppenheimer and Company. At a recent share price of $9, Mimecast’s market cap is roughly $475 million.
Mimecast offers a wide range of archiving and data security services that enhance corporate email systems with additional features for storing and retrieving emails, as well as an additional layer of protection for corporate email users, such as those running Microsoft Office 365. Roughly 60 percent of revenue is derived from channel partners, rather than a direct sales force. The company’s customers are based principally in three countries, with the U.K. accounting for 42 percent of sales, the US 38 percent, and South Africa 19 percent.
The company’s email archiving and threat protection services are derived from a broad range of industries, including legal services (17 percent), professional, scientific and technical services (14 percent), manufacturing (13 percent), and finance and insurance (12 percent), with no customer accounting for more than one percent of sales. The company claims a greater than 90 percent plus retention rate among customers for its services. Mimecast competes against a broad range of competitors, including Microsoft through its Exchange Server offering, Barracuda Networks (NYSE: CUDA), Symantec (NASDAQ: SYMC), and Proofpoint (NASDAQ: PFPT).
Mimecast’s net cash position post IPO is $126 million, and the company is generating cash from operations. To learn more about how Mimecast screens relative to its software peers, please contact Battle Road Research.
Ferrari IPO
Ferrari (NYSE: RACE), a luxury sports car manufacturer, is the newest addition to our Consumer sector coverage. The company, which was recently spun out of Fiat Chrysler Automobiles (NYSE: FCAU) in an IPO, was founded by Enzo Ferrari in Maranello, Italy in 1929. Ferrari is one of four storied Italian race car manufacturers, which along with Alfa Romeo, Masserati, and Lamborghini, have been testing the limits of automotive performance for decades. Until Ferrari started producing street legal cars in 1947, it manufactured race cars and sponsored race car drivers. Ferrari is still headquartered in Maranello, Italy today, and led by CEO Amedeo Felisa. Consensus estimates call for revenue of $2.85 billion in 2015 followed by $2.9 billion in 2016. EPS is projected to rise from $1.56 in 2015 to $1.69 in the coming year.
Ferrari debuted on the New York Stock Exchange on October 21, 2015 at a price of $52.00 per share. The offering contained 18.9 million shares. UBS Securities acted as the global coordinator of the offering, with Bank of America-Merrill Lynch, Pierce, Fenner & Smith, Allen & Company, Banco Santander, BNP Paribas, J.P. Morgan and Mediobanca—Banca di Credito Finanziario acting as joint book-running managers. At a recent share price of $49, Ferrari’s market cap is roughly $9.3 billion. Post-IPO, Fiat Chrysler owns about 80 percent of the company, and Piero Lardi Ferrari, the second son of founder Enzo Ferrari, owns 10 percent of the company.
Ferrari is focused exclusively on the design, engineering, production, and sales of its top of the line, high performance luxury sports cars, and over the years the company has helped to transform the car business, through its emphasis on style, performance and luxury. Through its avid and frequent participation in Formula One racing, which is considered to be the premier class of single-seat auto racing, the company continues its heritage in automotive racing. Fiat first acquired 50 percent of the company in 1969, and expanded its stake to 90 percent in 1988. Fiat also owns Maserati and Alfa Romeo.
Ferrari currently offers nine vehicle models, seven of which are sports cars. Ferrari boasts extremely high performance vehicles, with cars consistently going 0-60 miles per hour in approximately 3 seconds, with reported times as low as 2.6 seconds. All of Ferrari’s automobiles have either high powered V8 or V12 engines. The top reported speed of a Ferrari is 217 miles per hour, belonging to the limited edition LeFerrari model. Ferrari prices range anywhere from approximately $200,000 to about $1.4 million, with the most expensive being the LeFerrari model. With the motto: offer only the best engines, design and customization, Ferrari aims to tailor its high performance and quality vehicles to each individual customer.
Ferrari is in the process of phasing out its “458 model” cars, and replacing them with “488 model” vehicles, and will complete the process within the next several years. In 2014, Ferrari shipped 7,255 cars. This low volume production strategy is utilized to continue Ferrari’s reputation of being exclusive and rare. Ferrari carefully monitors and maintains production volumes as well as delivery times to continue this reputation.
As well as producing high quality vehicles, Ferrari’s brand stretches well beyond this. Ferrari’s cars symbolize speed, wealth and nobility, and are notoriously expensive, suggesting a high ranking in society for drivers. Aside from its symbolism, the Ferrari brand extends beyond just cars, offering sportswear, watches, theme parks, electronics, and other accessories.