SMSF administration software specialist Class believes its initial public offering (IPO) will boost its innovation and technology developments rather than hinder them, with the company announcing last Friday that its prospectus was lodged with ASIC to list on the Australian Securities Exchange.
Commenting on whether being accountable for a larger shareholder base could make future innovation decisions difficult, Class Super chief executive Kevin Bungard revealed it would actually mean the opposite.
“[The IPO] makes this more important because we need to continue to grow our market share and we need to continue to innovate,” Bungard told .
“I don’t think we can stop innovating anyway – it’s in our DNA.
“The business started that way. We’ve always looked at solving problems in creative and innovative ways so we will continue to look to do that in this space.”
The prospectus relates to an offer of up to 29,860,876 fully paid ordinary shares in Class, based on a price of $1.00 per share and equating to an indicative market capitalisation of about $116.35 million to $121.35 million.
Bungard said the next step was to wait for ASIC’s response.
“At the moment we’re in a period where the prospectus is reviewed by ASIC, so nothing can happen until that’s completed,” he said.
“ASIC may ask us to do some additional work or they may ask us to do a replacement prospectus and if so, they can extend the period from seven days to 14 days.”
He said in terms of the company’s future direction, post-IPO, it would still be committed to the SMSF space.
“We only have 16 per cent market share by fund numbers at this point and the SMSF industry was growing at 5 per cent last year, so we want to continue to grow out in that space,” he said.
“With the launch of our Class Portfolio product, we’re also looking to move outside of SMSFs as well as allow accounting practices doing SMSFs and non-super investments to be able to run those non-super investment portfolios alongside what they’re doing with super as well.”
He said accountants were generally using several systems to manage that, but wanted consolidation.
“One of the big pieces of feedback that we get from the clients is that they want everything on one platform because if you’ve learnt how to use one product, being able to then use that for investment portfolios inside and outside of SMSFs is much easier for the accountant because they’re already familiar with the tools.”
He said he was both excited and relieved about the prospectus lodgement.
“It’s been a lot of work to get it all done and the team has worked around the clock to pull all the information together – it’s an amazing amount of work,” he said.
“Originally, we intended to go to market in 2016, but about 12 months ago we decided to bring it forward to 2015.
“We’re not raising a lot of capital as part of the raise, so it’s really about the existing shareholders being able to have a market for their shares and to give our employees, clients and customers the opportunity to participate in the success of the business.”
The offer includes a Contribution to Class offer, which is open to eligible Class customers who will receive a priority invitation to participate, and a general offer, which is open generally to investors in Australia.
Class Super was used by more than 800 customers to administer over 90,000 SMSFs at the end of September 2015.
The cloud-based administration software was introduced in 2009.
Class chairman Barry Lambert announced at the company’s annual general meeting in November 2014 that given its continued positive business performance and high levels of market interest, Super IP, the owner of Class Super, planned to conduct an IPO as soon as practicably possible after 30 June 2015.