Australian cloud services provider Bulletproof officially exited the Australian Securities Exchange (ASX) on 6 June after shareholders agreed to a $24.7 million deal for the company to be acquired by AC3.
Despite a drawn-out bidding war between AC3 and Macquarie Telecom (ASX:MAQ), the move ultimately saw Bulletproof return to private ownership, under the wing of AC3’s parent company Klikon Group Holdings, after more than four years as a publicly-listed company.
Bulletproof made its debut on the ASX in January 2014 thanks to a reverse takeover of Spencer Resources Limited, effectively becoming Australia’s first publicly-traded pure play cloud services company in the process.
For Bulletproof co-founder and CEO Anthony Woodward, the decision to go public gave the company the backing it needed to scale quickly and grow from a business with annual revenues of around $18 million in 2014 to just under $50 million in the financial year ending June 2017.
“Bulletproof spent the first 13 years of its life as a private company and it was very successful, but our biggest issue and constraint was access to capital for growth,” Woodward told ARN.
“We could see significant growth opportunity in the market, especially in the cloud services industry, which was really starting to heat up, but we couldn’t get significant investment in the business from the private funding sector."
Since Bulletproof first started scouting around for additional capital prior to its public listing, the private equity and venture funding opportunities in the local market have grown.
At the time, however, there were fewer options for Bulletproof to get the backing it needed to scale its business, hence the public listing.
“I’m not suggesting that an ASX listing was our only opportunity for funding, but we saw a number of benefits,” Woodward said, suggesting that there would have been no way the company could have grown at the rate it did without the capital injection the public listing afforded it.
“We couldn’t have achieved what we did, we couldn’t have got the customers we did, we couldn’t have moved in the market the way that we did have we not been public is my view,” he said.
While going public gave Bulletproof the scale it had been yearning for, the move also had some drawbacks, not least of which involved the desires of shareholders and the costs of compliance, common considerations that all publicly-listed companies face.
“Now, the downside of that is, if the business model starts to come under fire from shareholders who are expecting to see a certain amount of return and a certain profit profile and they’re not seeing it, then that’s when the other side of the blade, the sword, starts to bite,” Woodward said.
“It’s said that a public company costs between three-quarters of a million and a million dollars a year, that’s the additional overhead to running the same business privately. That’s just coming straight out of your bottom line.
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