Download presentation
Presentation is loading. Please wait.
1
Entrepreneurial Re-Invention A Mid-Life IPO
Bill Eichhorn
2
Agenda Background Textura Solutions & Value Proposition
Positioning for Capital Market Success IPO Keys to Success
3
Background Textura formed in April 2004 by Eichhorn, Allin, Niden
Business solution and model created by a small group of industry, technology and general business experts Acquired some intellectual property and prototype software from others Filed US and Global patents in June 2004 Started operations September 2004 2004 to June 2006 Continuing market analysis Solution and business model refinement Software development Beta test clients Commercial Release July 2006
4
Agenda Background Textura Solutions & Value Proposition
Positioning for Capital Market Success IPO Keys to Success
5
Current Business Processes – Complex, Error Prone, Inefficient
Banks / Insurers Title Company Owner / Developer Sub-contractors Engineers Architects General Contractors Suppliers Architects Financing Companies Insurance Companies Owner/ Developer GC Prime Sub Sub Material Supplier Sub-tier Etc. . . . Title Companies Engineers Design Pre-qualification Bid Contracting Construction Close-out
6
Textura: Web-Based Suite of Collaboration Tools with Value for All
Banks / insurers Title company Owner/Developer Sub-contractors Engineers Architects General Contractors Suppliers Architects Financing Companies Insurance Companies Owner/ Developer GC Prime Sub Sub Material Supplier Sub-tier Etc. . . . Title Companies Engineers Construction Collaboration Solutions® From the inherent chaos of the current manual processes we have created order, structure and efficiency. Our suite of solutions do this by Rich functionality for each key process - Qualification, bidding, estimating, project management, invoicing and payment. Being a neutral third-party which is important to get all participants on the same solutions. One instance, one data base – one version of the truth. Using technology for document creation, data exchange, process management – reducing or eliminating errors and speeding up the processes. A value proposition for all participants. Revenue from all participants – sell to owners and GCs who mandate the use of Textura to all other participants. The end result - we have built an ecosystem platform for the industry. (new slide) Design Pre-qualification Bid Contracting Construction Close-out
7
Construction Lifecycle Benefits for All Participants
How Textura Works Advanced Internet technology to join together some or all of the participants. Facilitate and automate key construction management activities that involve interaction between construction participants Allow sharing of information across organization and project lifecycle Collaboration Project Manager Consultants Contractors Title Companies Owner / Developer Banks Project Budgets Contracts Applications / Invoices Payments Change Orders Compliance Docs Shared Database Support project activities from before the bid to after close-out Embed both the hierarchy and timeline of projects Construction Lifecycle Mitigate risk Reduce costs Improve business processes Improve decision making and control Maximize profitability Benefits for All Participants
8
Integration with Existing Systems
Textura enhances the value of your Accounting, Project Management and Document Management systems by interfacing real-time, financially accurate data. Approved Invoices Approved Payments Accounting Systems Textura Contracts Change / Variation Orders Contractor Compliance Status Signed Documents Contractor Compliance Documents Approved Invoices Approved Payments Textura leverages existing client technologies, actively exchanging data with cost accounting and other support systems, providing a seamless operating environment. Document Management Systems Estimate to Complete Cost Loaded Schedules Project Management Systems
9
Project – Contract – Subcontractor
Platform Strategy – Project Lifecycle Design Bid Contract Pre-constr-uction Constr-uction Close-out Operate Textura Construction Collaboration Solutions Dashboard Project – Contract – Subcontractor Qualification and Certification Solicitation and Bid Invoicing and Payment Contract Management Project Management Interfaces Accounting Systems Scheduling Prequal. Management Invitation- to-Bid Construction Payment Management Submittal Exchange Planrooms Subguard Claims Mgt. Bid Management LEED Certification DBE Management Bid Leveling and Analysis Performance Evaluation BIM Common Data Bases Subcontractor/Sub tier Projects Project Participants Financing, Insurance, Title Owner/ Developer General Contractor Sub contractor Sub-tiers, Material Suppliers
10
Construction Payment Management Overview
Draw Process Collect Invoices Review/Approve Invoices Prepare Owner Billing Compliance Management Lien Waiver Collection & Tracking Communicate Requirements Track / Communicate Status Hold Payments for Non-Compliance On System Sub Lien Waiver Collection Off System Sub-Tier Tracking & Collection Hold Payments for Non-Compliance Disbursement Process Review / Approval Payment Details Distribution
11
Our Solutions Result in Significant Direct and Indirect Benefits
With Textura Benefit Reduce Risk Consistent, financially intact, and legally correct documents Clear view of status and responsibility for next steps Document validation integrated with processes Analysis tools for proper and consistent assessment of risk Workflow tools implement standardized and consistent processes Gain Efficiencies Eliminate data entry and re-entry and enable re-use of the data Immediate, efficient routing and notification of tasks Automatic calculation of data Access to databases of organizations Interfaces to existing enterprise solutions Improve Control Up-to-date visibility into each process and status Single data repository for everyone, not multiple sources of data More efficient financial reporting / disclosure Management information always available Automated notification of actions
12
Project – Contract – Subcontractor
Platform Strategy – 2011+ Project Lifecycle Design Bid Contract Pre-constr-uction Constr-uction Close-out Operate Textura Construction Collaboration Solutions Dashboard Project – Contract – Subcontractor Qualification and Certification Solicitation and Bid Invoicing and Payment Contract Management Project Management Interfaces Accounting Systems Scheduling Prequal. Management Invitation- to-Bid Construction Payment Management Submittal Exchange Planrooms Subguard Claims Mgt. Bid Management LEED Certification DBE Management Bid Leveling and Analysis Performance Evaluation BIM In Development Common Data Bases Subcontractor/Sub tier Projects Project Participants Financing, Insurance, Title Owner/ Developer General Contractor Sub contractor Sub-tiers, Material Suppliers
13
Platform Strategy – 2013+ Our goal – to become THE collaboration platform for construction projects All construction project participants on platform Functionality for all roles; value for all roles Revenue from all participants Our Advantages in Delivering this Industry Platform Sustainable competitive differentiation through CPM Ability to deploy capital Vision Client base and experience Service levels This requires Full set of functionality and applications – build or buy Industry acceptance of our platform Speed – to market, and of platform build-out Critical mass of customers
14
Business Performance Despite challenging macro environment
Textura’s clients’ volumes at approximately 70% of 2008 highs During this time Textura has increased its project volume approximately 5x
15
Agenda Background Textura Solutions & Value Proposition
Positioning for Capital Market Success IPO Keys to Success
16
SaaS Companies – Textura Positioning
Delivery Model Software hosted, operated, and maintained by vendor Over the internet not private networks No application software installed by client Business Model Client does not own any of the software Usage fees instead of one-time license fee Software-as-a-Service Generally agreed that a SaaS model includes Single-instance Multi-tenancy SaaS is NOT equivalent to: Cloud-based computing Subscription-based revenue model SaaS as a category is also generally considered to be applicable only for business applications However, many consumer applications are in fact SaaS models Amazon and all e-commerce sites Facebook and all social media sites
17
SaaS Companies – Textura Positioning
SaaS is the evolution of existing models . . . Service Bureaus ADP, Fiserv, First Data; Apollo Not Web-based front-end Not easy-to-use user interface/application Not public networks Still going strong but evolving the applications into SaaS Application Service Providers (ASPs) USi, Connectria Operate “other people’s” software Limited to managing infrastructure/hardware/network Largely defunct or have morphed into “colocation” or “cloud computing” providers (Rackspace, Latisys) Traditional Software Microsoft, SAP, all our construction ERP competitors Sell software that client’s IT department installs, operates, and maintains Generally trying to shift to software-as-a-service model
18
SaaS Companies – Textura Positioning
Why does everyone want to be – or claim they are – a SaaS business. . . Superior Business Model Significant customer benefits e.g. lower initial costs; faster implementation; upgrades; lower risk; less IT . . . Significant company benefits e.g. expanded markets; predictability/visibility; lower costs (long term) . . . Permits new business concepts – such as Textura! Growth Opportunity More software is being purchased in a SaaS model than traditional approaches Significant advantages to customers New application types depend of SaaS concepts Significant legacy software replacement cycle is underway Fashion SaaS is perceived as the “new” way to do things “you don’t get fired for buying SaaS” Everyone else is doing it Valuation Public and Private Investors’ preferences Established software vendors (that are not SaaS) need to “buy their way in” e.g. SAP acquisitions of SuccessFactors and Ariba
19
SaaS Companies – Textura Positioning
Why does everyone want to be – or claim they are – a SaaS business. . . Superior Business Model Shiny and New + Growth Prospects + Avoidance of (unpleasant) Surprises Results in higher valuation multiples SaaS 4.8x (median values; forward revenue multiple) Traditional Software 3.8x Processors 2.8x BPO 0.9x Growth Opportunity Fashion Valuation
20
SaaS Companies – Textura Positioning
SaaS still is relatively scarce but is growing in the pipeline of public companies Completed IPOs IPOs in Registration Technology 49 Software 16 32% of Technology SaaS 6 12% of Technology 38% of Software Technology 34 Software 9 26% of Technology SaaS 4 – 6 12% - 18% of Technology 44% - 66% of Software
21
SaaS Market Profile – Company Characteristics
Textura Textura Textura Textura
22
SaaS Valuation Drivers – Focus is on Growth
The market is – and recognizes it is – paying for growth; and specifically revenue growth
23
SaaS Valuation Drivers – Size Doesn’t Matter
No evidence that size matters in obtaining IPO valuation Multiple does generally increase with revenue growth Size of Bubble represents multiple of forward revenue at IPO Multiple does not generally increase with size
24
Successful IPO – Peer Analysis
Peers Average and Range Textura at IPO Revenue Growth at IPO CY+1 29.8% (7.4% to 75.8%) 52.9% CAGR 22.3% (9.0% to 51.8%) 57.0% IPO Revenue Multiple 4.1x (2.2x to 8.7x) Peers Average and Range Post-IPO revenue growth CY+1 22.7% (-6.0% to 57.6%) CAGR 21.0% Post-IPO Revenue Multiple 5.0x (1.1x to 8.7x) Note lower at-IPO revenue multiple despite higher growth rate, reflective of impact of IPO discount
25
Successful IPO – Factors Affecting Valuation at Offering
Negative Factors Relatively small revenue Relatively complicated story Perceptions of end-market High IPO discount (Currently) Timing Insider sales Economic conditions (or perceptions thereof) Offering size Valuation being sought Positive Factors High growth Sustained growth Very large total addressable market Early stage of market penetration Multiple growth avenues Next-generation business model Proven acquisition capability International presence Vertical market Low insider selling
26
Major IPO Process Tasks
IPO Timeline Major IPO Process Tasks August Information package drafting Finalize financial model Committee charters Other governance items September Analyst meetings RFP responses October Book-running banker meetings and selection Organizational Meeting S-1 drafting November S-1 filing (confidential) Co-manager analyst and banker meetings December Co-manager selection First round SEC comments SEC comments responses preparation First Amendment filing (confidential) January Analyst day preparation and finalize forecast Analyst day hosting and follow-up First Amendment SEC comments February Analyst model review and follow-up Second Amendment filing (confidential) Second Amendment SEC comments March Roadshow Drafting Analyst follow-up and model finalization Third (final) Amendment filing (public) Receive SEC sign-off April Roadshow dry-run Go/No-go assessment and decision Set price range/Distribute “Red Herring” Roadshow and Pricing/Allocation
27
Going Public vs. Staying Private – Key Considerations
Stay Private Go Public Maintains full control Gives investors liquidity Some investors with us for 10 years Avoids quarterly / short term focus Raises all the capital required Requires on-going capital raises to build out platform Elevates market profile: Enhanced client credibility Potentially opens doors to very large / international sales prospects Avoids costly regulatory compliance Provides public currency for additional acquisitions Long-term annuity for investors Protects margins
28
Agenda Background Textura Solutions & Value Proposition
Positioning for Capital Market Success IPO Keys to Success
29
Investment Highlights
Global market opportunity Compelling client value proposition CPM – no competition Exceptional revenue growth High EBITDA margin potential Experienced team
30
Over $28 billion of Total Addressable Market
Expansion Monetization Huge Total Addressable Market Total Addressable Market >$28.0b Target Global Opportunity ~55-60 bps Target Global Markets >$4.8t Current Opportunity ~34 bps Current Markets and Solutions >$4.4b Mobile +5–10 bps +$4.0b Mobile +4 bps Current Markets >$1.3t Global Platform ~50 bps ~$24.0b Current Solutions ~30 bps Mobile +$0.5b ~$3.9b Key Strategies: North America market penetration Global expansion to Asia and Western Europe Key Strategies: Cross-sell solutions Strategic acquisitions Solution expansion Solutions to platform Pricing Result: Potential for long term very high revenue growth rates
31
Multiple Long-term Growth Opportunities
CPM GradeBeam Project lifecycle from design to operation Integrated solution suite US, Canada, Australia Data Submittal Exchange PlanSwift Latista PQM GradeBeam Mining Price BidOrganizer Financing 7 primary solutions Few multi- product clients Submittal Exchange Future Oil and Gas Western Europe, Developed Asia Related markets PlanSwift US, Canada, Australia Bundled sales/ pricing Platform strategy Global expansion Approx. 10% penetration Strategic acquisitions New products Cross-sell solutions Market penetration
32
Recent Highlights – Continuing to Execute our Strategy
Strong Quarterly Results Year-over-year revenue growth of 60% Organic revenue growth of 52% Approximately $135 billion in construction value active on our solutions Operating Leverage Improving gross margin and EPS trajectory Gross margins improved from 79% in prior quarter to 80% Adjusted EPS loss improved from $0.16 in prior quarter to $0.12 Turned cash flow positive for Q2 2014 Growth Strategy Increased functionality of existing solutions Continued integration of solutions and progress towards platform Launch of UK business and new strategy for Australasia Implemented CPM price increase for sub usage fees Effective on all new projects after February 1 Adds 2 to 3 basis points of revenue on subcontracted contract value Pricing Power
33
Implementing Clients Drive Predictable Multi-period Growth
Case Study Client #1 Case Study Client #2 Growth with project growth Steady ramp to full implementation Focusing on activity driven revenue, let’s take a look at how these metrics provide visibility and predictability into revenue growth over a period of time by reviewing some specific client examples. When we sell a new client our CPM solution, our client service team works closely with the client to obtain a detailed understanding of their business, including the number and size of projects the client is managing on an ongoing basis, or what we call active projects. Together, we work with the client to develop an implementation plan that typically occurs over 4 to 10 quarters, depending on the size of the client. This plan provides us with visibility into the steady increase of project activity and revenue growth during the implementation time period. These graphs represent our experience implementing two large clients, and show the number of active projects beginning from the time they were sold through today. You can see the steady increase in project activity over multiple periods from the time a client begins using our CPM solution until the client reaches the point where all of their projects are managed on CPM. Once the client reaches full implementation, we often continue to see growth in project counts reflecting our clients business growth. Once a client starts to implement, Textura has good visibility into the expected growth in active projects and as a result revenue growth over future periods. (new slide)
34
Projects Already On-system Drive Growth and Predictability
Revenue: Percentage of revenue from existing projects Quarterly CAGR: 16% Another key element of our financial model is the predictability of our revenue. For activity driven revenue specifically, 93 – 95% of revenue in a quarter comes from projects that were added prior to the start of the quarter. The majority of the new projects added in a quarter are from existing clients. Clients we sell in any given quarter while not impacting the current quarter will drive project and revenue growth over the next 4 to 10 quarters. The result - high revenue visibility and predictability. (new slide)
35
Business Collaboration Single/Internal Process SaaS
SaaS Solutions: The Future of Mission-critical Collaborative Business Interactions Increasing value-add, revenue opportunity, margin opportunity, and differentiation Business Collaboration Social/Mobile Single/Internal Process SaaS Service Bureaus Driven by functional, hardware, operational, and performance complexity Leverage massive economies of scale Highly standardized transactions Move enterprise systems to hosted platform Provide lower cost of ownership Targeted at non- mission critical systems Bought from operating not capital budgets Support large numbers of internal users Connect large networks of individuals Enabled by emergence of smartphones and tablets Driven by high profile of consumer-centric social businesses Support core, mission- critical activities Strong ecosystem effects Because it can’t be done any other way except through a SaaS solution! Neutral third-party Single database and application shared across all participants Payroll (ADP, Paychex) Financial back-office (Fiserv, First Data, SunGard) Payroll (Ultimate Software) HR (Cornerstone; Concur) CRM (salesforce) CRM (salesforce), LinkedIn Facebook Internal networks
36
Sustainable Competitive Advantages Protect Growth Opportunity
Patent portfolio 40 patents for CPM and 52 pending CPM has no direct competitor - globally Our other solutions face competition from industry-specific ERPs or mostly small point solution providers – limited scale and investment No significant competitor exists as a SaaS neutral collaboration platform Our platform approach and ability to deliver are highly differentiated Deep industry process knowledge - unique Installed user base Very complex functionality Integration to client systems CPM is 70% of our revenue. We have no competitors. Our patent portfolio is very strong – both US and around the world. We are already viewed as the industry solution in North America. There are 250,000 major ways to configure CPM and with unique project documents over 500 million ways to configure CPM – this is very complex software and would be hard to duplicate without spending huge amounts of money and many years of development. For our other solutions there are some competitors although our solutions are either the number 1 or 2 player in each space. Our platform strategy and approach should result in success for each solution. (new slide) Neutral third-party SaaS offering
37
Client Case Study #1 – Strong ROI
Internal Study Findings: “Textura CPM saves hours a month” “Time savings for our risk administrator and the project managers” “Improves accuracy of paperwork” “Greatly improves subcontractor relations” “Creating capacity is essential to avoid having to hire additional staff” General Contractor ROI: Estimated savings: $360,000 annually Estimated by the general contractor to cost them 4 basis points of construction value: $74,000 annually Estimated total network revenue to Textura: ~$300,000 annually Denver-based General Contractor A few case studies: This is a new general contractor client in Denver. They are a mid size GC and our revenue will be about $300,000 a year from their project network. On the right is the client’s process flow diagram and you can see the number of steps they have crossed out by using Textura CPM. On average GCs eliminate about 60 to 70% of their steps in the monthly invoicing process and about the same in time savings. Note that the savings – the value proposition -are both tangible and easily captured. Also note the comment about better relations with their subs – we help all the participants work together. (new slide) Textura CPM eliminates 15 out of 20 process steps
38
Our Client Base is a “Who’s Who” of the Industry
Owners (100+) General Contractors (600+) Subcontractors (450,000+) Image: Humber River Regional Hospital , Toronto, ON – a Textura project
39
Offering Summary Shares Offered Price Over-allotment Lock-up Period
5,750,000 primary shares; no selling shareholders Price $15.00 Over-allotment 15% (750,000, all primary shares; no selling shareholders) Lock-up Period 180 days Ticker TXTR (NYSE) Use of Proceeds Global and solution portfolio expansion; Repay $8.1 mil. of acquisition-related indebtedness Bookrunners Credit Suisse, William Blair Co-managers Barrington Research, JMP Securities, Oppenheimer Pricing June 7
40
Post-IPO Stock Performance
7/2/13 Research Analyst initiations: stock trades up 8% First day close: $20.91 Close on 7/31/13: $30.16 – 102% since IPO Post-IPO volume-weighted average price: $25.84 IPO Price: $15.00
41
Secondary Offering Shares Offered Price Over-allotment Date
$38.00 Over-allotment 600,000 shares Date September 20, 2013 Improves market liquidity Potentially helps maintain market momentum One of highest multiple financial transactions in 2013
42
Agenda Background Textura Solutions & Value Proposition
Positioning for Capital Market Success IPO Keys to Success
43
Keys to Success Great idea, thoroughly researched
Ability to raise a lot of money in different ways Phenomenal amount of persistence Terrific staff Experienced management team Pre-emptive anticipation of recession
Similar presentations
© 2025 SlidePlayer.com Inc.
All rights reserved.