Fadel Partners Inc. Admission to AIM and First Day of Dealings (5530V)

TIDMFADL

RNS Number : 5530V

Fadel Partners Inc.

06 April 2023

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

DEFINED TERMS ARE AS STATED IN THE COMPANY'S ADMISSION DOCUMENT DATED 2 APRIL 2023 (THE "ADMISSION DOCUMENT").

6 April 2023

Fadel Partners, Inc.

('FADEL', the 'Company' and, together with its subsidiaries, the 'Group')

Admission to AIM and First Day of Dealings

Fadel Partners, Inc. (AIM: FADL), a leading brand compliance and rights and royalty management software provider, is pleased to announce the admission of its entire issued share capital to trading on AIM, a market operated by the London Stock Exchange plc ("Admission").

Admission will take place, and dealings in the Company's depositary interests over common shares of $0.001 ("Common Shares") will commence, at 8.00 a.m. today under the ticker 'FADL'.

Founded in 2003 by Tarek Fadel (Chief Executive Officer) and headquartered in New York (United States), FADEL has since grown to a team of 116 full time employees, plus an additional pool of c.50-60 contractors. FADEL is a leading developer of cloud-based brand compliance and rights and royalty management software, working with some of the world's leading licensors and licensee across media, entertainment, publishing, consumer brands and hi-tech/gaming companies.

FADEL has two solutions, being IPM Suite (rights and royalty management for publishers and licensing) and Brand Vision (an integrated platform for brand compliance & monitoring that includes content services, digital rights management, AI-powered content tracking, a brand monitor, and 100 million ready-to-license images). The use of FADEL's products spans across marketers and advertisers to accelerate campaign creation, eliminate content misuse and maximise asset reuse; finance teams to generate and precisely manage royalty calculations, statements and audit reports; and licensing professionals to identify licensing violations, optimise revenue and avoid over/under royalty payments.

Key Highlights:

 
      --   Based on the Placing Price of 144p, the market capitalisation 
            of the Company will be approximately GBP28.8 million 
            at Admission 
      --   In connection with Admission, gross proceeds of GBP8.0 
            million were raised by way of the Placing and the Fadel 
            Loan 
      --   finnCap Ltd is Nominated Adviser and Broker in relation 
            to the Placing and Admission 
      --   Following Admission, the Company will have 19,968,003 
            Common Shares in issue 
      --   The Company's ISIN is USU3033R1024 and its SEDOL is 
            BN6NDF9 
 

Use of Proceeds:

The Directors believe that the Group's solutions are scalable and help address some of the challenges companies face as a result of digital transformation, growing amounts of content and IP and complex licensing arrangements. Therefore, the Directors believe that the Group is well positioned to capitalize on fundamental market growth and pursue its growth strategy of selling into new and existing geographies, growing existing industries, entering new industries and evolving its products to meet customer needs.

The gross proceeds of the Placing of the New Shares and Fadel Loan will be used by the Company to:

 
      --   Invest in sales to proactively sell its solutions into 
            a growing market (US/European sales expansion through 
            direct sales, partnerships and distribution arrangements); 
      --   Investment into marketing (leads, ads and webinars); 
      --   Conduct R&D to continue to innovate and develop its products 
            to enhance its existing offering and address its customer 
            and potential customer needs; 
      --   Reinforce growth (support and services team to complement 
            the sales team effort); and 
      --   Provide general working capital, including the advisory 
            costs and other expenses of the Placing and Admission. 
 

Tarek Fadel, Chief Executive Officer, commented :

"We are delighted to announce our admission to trading on AIM.

"FADEL has already established itself as a leader in its field, delivering solutions to companies across numerous sectors and geographies. The successful completion of our IPO represents the beginning of a new chapter and this investment will allow us to expedite our growth strategy to scale alongside the rapidly expanding digital content and IP market and to capitalise on the significant opportunity available to us.

"We believe that AIM is a natural fit for FADEL as it has a proven track record for helping technology companies achieve their growth ambitions.

"I am delighted to welcome our new shareholders and would like to thank them for their support. We look forward to working with them in the years ahead as we build on our strong foundations and push forward with our growth plans.

"We expect to announce our results for the 12 months ended 31 December 2022 in early June 2023 and look forward to seeing our investors at that time."

Key Investment Case Highlights

 
      --   Innovative, scalable technology offering with a strong 
            track record - FADEL's award-winning enterprise-ready 
            cloud software provides solutions for content and IP creators 
            (licensors) and content and IP users (licensees). Its 
            system is built on a highly scalable architecture. Its 
            customers have complex needs, with the IPM software helping, 
            inter alia, to manage and process complex contracts and 
            licensing requirements and Brand Vision helping marketers/licensees 
            to accelerate their digital strategy to allow them to 
            manage, inter alia, large volumes of content and associated 
            usage rights. 
 
      --   Blue chip and loyal customer base - The Group has a blue-chip 
            customer base, with customers such as Pearson, L'Oréal, 
            Hachette Livre and Marvel Entertainment. Its customers 
            include some of the largest licensors who drive significant 
            licensing revenue as well as three of the "big five" French 
            publishers. Through IPM Suite, FADEL's larger customers 
            have achieved significant ROI from cost efficiencies and 
            licensing revenue growth opportunities not available using 
            legacy solutions. As a result, the Group has reported 
            exceptionally low churn in customers using IPM Suite following 
            the implementation phase, to date. 
 
      --   Established sales and marketing strategy - The Group 
            has an established direct and indirect sales strategy. 
            The Group has salespersons in the US, UK and France. Indirect 
            sales are through the Group's established partnership 
            and reseller arrangements. In respect of marketing, FADEL 
            is considered as a thought-leader in its field - representatives 
            from the Company regularly attend leadership events and 
            are active research contributors and its employees sit 
            on relevant industry boards, such as the BISG. These marketing 
            efforts contribute to general market awareness of FADEL 
            and its solutions. 
 
      --   Strategically positioned to capture market growth - There 
            is fundamental growth in digital content and IP (across 
            industries, geographies and channels) and therefore a 
            growing requirement for solutions to manage this digital 
            content and IP. In the rights and royalty ecosystem (which 
            IPM Suite addresses), a significant proportion of companies 
            are still using more traditional spreadsheet-based methods 
            of managing licenses and royalty calculations, typically 
            using large teams and sometimes legacy royalty systems 
            that are no longer 'fit for purpose'. The digital brand 
            compliance marketplace (which Brand Vision addresses) 
            is still relatively nascent and highly fragmented, with 
            a vast number of large brands bringing their content creation 
            and digital agency function in-house. As companies implement 
            digital transformation strategies, the ROI on an enterprise 
            solution like FADEL is becoming more apparent. 
 
      --   Established low-cost but highly skilled offshore R&D 
            and delivery centre in Lebanon - The Group has operated 
            its own offshore R&D and delivery centre in Beirut, Lebanon 
            since 2006. In doing so, the Group benefits from the high 
            level of education in that country, including Engineering 
            and Business majors, the multi-lingual capabilities of 
            the employees and low cost and low attrition attained 
            by operating in Lebanon. This has proven to be a strategic 
            competitive differentiator for the Company allowing it 
            to expand its product and service offerings while maintaining 
            high customer satisfaction at low operating costs. 
 
      --   Highly experienced and well-connected Board - The FADEL 
            Board, both Executive and Non-Executive, is constituted 
            of prominent and experienced figures in the industry including 
            founder and CEO Tarek Fadel and CFO Vicary Gibbs. The 
            FADEL Board has collective experience in high growth software 
            environments, alongside strong industry relations. The 
            Directors believe that this will enable FADEL to pursue 
            its growth strategy and ensure strong origination for 
            new opportunities. Additionally, between them the Board 
            has public market experience of both AIM and other exchanges. 
 

      --   Strong financial record with scalable revenue model - 
            In the twelve-month period ended 31 December 2021, FADEL 
            generated revenue of $12.0 million (31 December 2020: 
            $7.8 million) of which 54 per cent. was recurring. Year-on-year 
            revenue growth was 53 per cent, with a two-year CAGR of 
            50 per cent. In the six-month period ended 30 June 2022, 
            FADEL generated revenue of $6.7 million, of which 62 per 
            cent. was recurring. At the core of the revenue model 
            is a SaaS platform generating subscription revenue. IPM 
            Suite, which sits as the foundation of the business, typically 
            has large contract values of which a significant amount 
            is related to services, whilst the service revenue is 
            non-recurring in nature, the integration complexity results 
            in defensive revenue. Brand Vision, which has grown out 
            of the acquisition of IDS in FY 21 has diversified our 
            product revenue. Going forward, the Company expects to 
            see a higher proportion of subscription revenue coming 
            from Brand Vision, where its products can be deployed 
            quickly with limited integration requirements and lower 
            implementation costs. The Directors believe that the Company 
            has a defensible revenue with significant upside potential. 
 
      --   Strong current trading - Revenue for the six month period 
            from 30 June 2022 was $6.5 million(1) , resulting in expected 
            revenue for FY 22 of $13.1 million(1) (unaudited management 
            information). This was a 10.1 per cent. year-on-year increase 
            (FY 21: $12.0 million), notwithstanding foreign exchange 
            headwinds the global economic environment. In respect 
            of recurring revenue, there was 34 per cent. year-on-year 
            growth (Subscription and support: $8.7 million, unaudited, 
            FY 21: $6.5 million) with a significant contribution from 
            subscription sales in Brand Vision, including a full financial 
            year's contribution from IDS. 
 
      --   A clear growth strategy - The Group intends to use the 
            proceeds to pursue its organic growth strategy to expand 
            its business and the breadth of its operations, hire additional 
            employees, expand into new markets, further invest in 
            research and development and sales and marketing, and 
            incur costs associated with general administration (including 
            expenses related to being a listed company). 
 

For further information please contact:

 
 
  Fadel Partners Inc. 
Tarek Fadel, Chief Executive Officer            Via Alma PR 
 Vicary Gibbs, Chief Financial Officer 
 
finnCap Ltd (Nomad & Broker)            Tel: [phone] 
                                                       0500 
Jonny-Franklin Adams 
Emily Watts 
Abigail Kelly 
Milesh Hindocha 
 
Alma PR                                  Tel: [phone] 
                                                       0205 
Josh Royston                             [e-mail] 
Andy Bryant 
Matthew Young 
 

About FADEL Partners Inc.

FADEL is a leading developer of cloud based brand compliance and rights and royalty management software, working with some of the world's leading licensors and licensees across media, entertainment, publishing, consumer brands and hi-tech/gaming companies. The Group combines the power of rights management and content compliance with sophisticated content services, AI-powered visual search and image and video recognition.

FADEL has two solutions, being IPM Suite (rights and royalty management for publishers and licensing) and Brand Vision (an integrated platform for Brand Compliance & Monitoring that includes Content Services, Digital Rights Management, AI-Powered Content Tracking, a Brand Monitor, and 100 million Ready-to-License Images).

The Group's main country of operation is the United States, where it is headquartered in New York, with further operations in the UK, Lebanon, France, Canada and India.

For more information please visit the Group's website at: www.fadel.com .

This announcement is not for publication or distribution, directly or indirectly, in or into the United States of America. This announcement is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States.

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April 06, 2023 02:00 ET (06:00 GMT)