Investment analysis of GFT Technologies, a financial services IT consulting firm

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Integral service around a transaction
BY : Diego GutiérrezNovember Fri, 2017

Meet the investor profile of GFT Technologies, a German consultancy specialising in IT solutions for the international financial and insurance industry.

Meet the investor profile of GFT Technologies, a German consultancy specialising in IT solutions for the international financial and insurance industry.

About GFT Technologies

Founded in 1987 in St. Georgen and headquartered in Stuttgart (Germany), GFT Technologies is a company specialising in the development of customised IT and business consulting solutions for financial institutions: capital markets, retail banking, private equity and insurance.

The company is a pioneer in offering nearshore services since 2001 and has a team of 5,500 collaborators (4,700 employees and more than 600 freelance IT experts) in 11 countries: Germany, Brazil, Canada, Costa Rica, Spain, Italy, Mexico, Peru, Poland, Switzerland, United Kingdom and USA. GFT has been operating in Spain since 2001 and has offices in Alicante, Lleida, Madrid, Sant Cugat del Vallés (Barcelona), Valencia and Zaragoza.

In its 30 years of history, GFT has had reference clients in the global financial and insurance sector, such as BBVA, Banca Monte dei Paschi di Siena, Banco Sabadell, Barclays, Bank of America Merrill Lynch, Catalana Occidente Seguros, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC and Mapfre, among others.


GFT's economic and financial performance

About half of GFT's revenues come from its investment banking business, the other half from retail banking. On the other hand, the German consultancy achieves approximately 50% of its revenues from onshore operations and the remaining 50% from nearshore.

Since 2013, GFT has achieved stable growth in key financial variables, a sign of the Group's strong position. The German company achieved revenues of €316.52m in the year to September 2017, achieving dynamic growth thanks to its digital solutions for retail banking customers in Continental Europe. Despite increased cost-saving measures for its investment banking customers, total revenues were slightly higher than in the same period last year (€314.28m). GFT Spain led this growth with revenues 15% higher than in 2016, driven by demand for digital transformation projects from local financial institutions.

However, its consolidated ebitda declined compared to 2016: €29.1m profit in the year to September 2017, down 14% from the same period last year (€34m), affected by exceptional factors such as restructuring, currency fluctuations and increased capital expenditure.

This has forced GFT to adjust its forecasts for the full year 2017. The cuts made by two of its investment banking clients will continue in the fourth quarter of 2017 and, at the same time, GFT is investing to expand into the industrial sector. Taking this into account, the company expects ebitda of €34m in 2017. Revenues are expected to remain stable at €415M.

GFT Technologies' M&A operations

The M&A Professionals

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Our diferentiation

Market Research Technology
Our team of market analysis specialists is continuously analyzing the investments of the most active markets in the industry in order to unceasingly contribute ideas of the current market situation and identify the most relevant trends for senior management. We integrate the most relevant sources of information which allows us to discover the most interesting companies for venture capital and similarly helps us to identify the investors with the highest probability of involvement in an M&A process to ensure the success of our sell-side operations.

The reports and deductions of our advisors provide a broad view of the sector, both geographically and from the complementary or adjacent markets perspective.
Technology Data Analytics
for M&A
Advanced data anlytics is a weapon". Intelfin is an artificial intelligence tool we use for investing and creating value in SMEs through competitive analytics and the enterprise environment.

IntelFin consists of a cognitive system, which, through the application of advanced analytical technologies, facilitates the automation of investment and financing decisions in the field of non-listed companies and especially SMEs in high-growth sectors.

The information related to these companies is characterized by their lack of transparency and heterogeneity; thus, it is necessary to develop an advanced analysis which is as much predictive as prescriptive and is developed in a natural language custom, suitable to obtain greater clarity and knowledge of the investment scope.

The IntelFin system focuses especially on analyzing the variables that define and influence the competitive environment of a sector and the positioning of a company, analyzing their influence on future value creation. Therefore, IntelFin supports strategic decision-making to senior management by resolving questions such as:

¿What are my competitors' priorities, strategies and expansion plans? Who's my competition? Which competitor is most likely to grow at a higher rate?
Which areas of activity/business models will receive the most investment? Which sectors are most attractive to investors?
Which companies are going to experience the most growth in the near future? Which companies are most likely to receive investment or be acquired?
Training Methodology
We have developed training programs in an innovative set-up which guarantees our teams the acquisition of technical competences both in the field of corporate finance and in the field of psychology, that is much needed when it comes to negotiation processes.

We have a culture of continuous improvement of our processes, closely related to the use of information systems that allow the enhancement of internal communication between our teams, as well as external communication with our customers. Hence, we extend best practices identified internally in an efficient and rapid manner among our members.

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