August 28, 2019 / 9:11 AM / 21 days ago

UPDATE 1-German software firm TeamViewer to float on stock exchange in September

* TeamViewer expected to be valued at 4-5 billion euros -sources

* Permira to sell about 30% of shares, no new stock issued

* No dividend planned for first 1-2 years -CFO

* Company reported 2018 EBITDA margin of 52% (Adds quotes from CEO, background)

By Arno Schuetze and Douglas Busvine

FRANKFURT, Aug 28 (Reuters) - Private equity-backed German software company TeamViewer is planning to list on the Frankfurt stock exchange, the company said on Wednesday, defying a gloomy outlook for Europe’s economy, arguing that its products help companies work more efficiently.

TeamViewer sells software for online meetings and remote desktop access, with more than 20 million support sessions taking place each day on its platform. Unlike many other fast-growing technology companies going public, TeamViewer is already profitable.

“We benefit when companies focus on efficiency and invest in digital technologies,” TeamViewer Chief Executive Oliver Steil told Reuters, adding that the firm had grown regardless of economic cycles.

People familiar with the deal said that about 30% of the firm’s shares will be floated, valuing the company’s equity at 4-5 billion euros ($4.5-5.6 bln) and making it one of Europe’s largest listings of the year.

After a steady stream of stock market listings last year, IPOs have slowed in Germany in 2019, with VW truck unit Traton being the only sizeable Frankfurt listing of the year.

Permira bought TeamViewer for 870 million euros in 2014 and Permira’s Germany head Joerg Rockenhaeuser said that the investor wanted to remain a major shareholder after the IPO.

TeamViewer says that its addressable market, currently worth 10 billion euros will grow to 30 billion in 2023, as companies invest in digitally controlling their production machines and the trend of employees working from home intensifies.

The company operates on a subscription-only model, meaning that it gets a predictable stream of cash flows, about three quarters of which are recurring. In 2018, it launched an enterprise version of its software.

TeamViewer, which employs 800 staff, in 2018 posted earnings before interest, tax, depreciation and amortization of 121 million euros on sales of 230 million.

In 2019, the company expects revenues to grow by 35-39% to 310-320 million euros and EBITDA of 177-183 million.

Listed peers include Zoom Communications, Okta and Slack, which listed on the New York Stock exchange in June at a blockbuster valuation of more than 50 times its revenues.

In the IPO, Permira will offer shares, while no new stock will be issued, meaning the company will not reap any proceeds from the deal.

“We don’t need any fresh money. Our business has been profitable from the start, and there are no major acquisitions on the horizon,” TeamViewer’s Steil said.

Chief Financial Officer Stefan Gaiser added that investors should not expect the company to pay a dividend, at least not in the first one or two years.

Goldman Sachs and Morgan Stanley are organising the IPO with the help of Bank of America, Barclays and RBC Capital Markets, while Lilja is acting as so-called IPO advisor.

$1 = 0.8973 euros Additional reporting by Alexander Hübner, editing by Louise Heavens

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