Avanceon Limited another IPO in the pipeline at KSE – AHL Research
By: Arif Habib Limited
+92 21 111-AHL-111
Today, we are presenting an informative piece on one of the upcoming IPOs at the Pakistan capital market.
3rd IPO of the year – Avanceon Limited
Avanceon Limited (AVN) intends to issue 25.17mn shares i.e. 25% of post IPO paid up capital through listing of its shares on the Karachi and Lahore Stock Exchanges. In this regard, AVN is seeking interest from select group of institutional and high net worth investors to participate in the book-building process, which will be followed by a general public offering (IPO). Floor price for the transaction has been set at PKR 14/share and formal book-building will be conducted on 27-28 November, 2013.
About the company
The company is a leading provider of automation, control systems integration, proprietary energy management solutions and support services. It is among the select group of ‘certified members’ of Control System Integrators Association (‘CSIA’) and is also listed on the Control Engineering Magazine’s System Integrator Hall of Fame.
Currently, AVN has offices in Dubai, UAE (covering Middle East) by their 100% owned subsidiary Avanceon Free Zone Establishment UAE (AFZE), Lahore, Pakistan (covering South East Asia) and Pennsylvania, United States of America (covering North America) by their other 100% subsidiary, Engro Innovative Inc. USA (EI). AVN at present operates in three broad categories, which are: 1) automation controls, 2) energy efficient systems, and 3) aftermarket services. As per current shareholding, the Wain Family owns ~100% of the existing 75.5mn shares of Avanceon Limited.
AVN has been into the automation business for last 24 years and has, over the years, evolved from being an automation company to a 360-degree solution provider for automation, energy management and service & maintenance needs of their customers. The company has explored various frontiers and geographies establishing strong footprint in South Asia, Middle East and USA.
Servicing clients over a span of two decades, AVN has completed several projects for major bluechip companies enabling it to earn strong credentials, move up the learning curve and develop a diverse client base essential for a sustainable business model.
In Pakistan, AVN is the only local company with the capability of automation and process controls, energy management systems and specialized solutions. International companies that used to operate in Pakistan have taken an exit due to the prevailing political / law & order situation and no other local company has the expertise to deliver such complex solutions. AVN has taken over several contracts, which were allocated to international contractors earlier due to their inability to meet on ground service requirements.
This window of opportunity has enabled AVN to establish long term relationship with bluechip companies. AVN has implemented various solutions in different companies, including big names like Fauji Fertilizer Company (FFC), Nestle Pakistan (NESTLE), Engro Fertilizer (EFERT) and Engro Foods (EFOODS), Pakistan Petroleum Limited (PPL), Akzo Nobel Pakistan (AKZO), Kott Addu Power Company (KAPCO) and P&G Pakistan, to name a few.
Middle East operations
In the Middle East, AVN has gained dominance through its unique international execution model. The company is able to compete with several major competitors through its aggressive pricing and, therefore, has managed to come in the league of major automation and control provider in the Middle East. Saudi Aramco, Dubai Metro and Kuwait Petroleum are few big names to whom AVN has successfully provided and implemented various automation solutions.
Automation and process control companies on a global level have expanded their horizon from core automation to training and implementation of safety systems. Going forward, AVN intends to capitalize on its inherent strengths to further penetrate the Middle East market by setting up offices in Qatar, Kingdom of Saudi Arabia (KSA) and the UAE. The management is committed to quality and to deliver exceptional service standard in the operating segments. AVN’s growth strategy is horizontal; they are committed to horizontal expansion and will enter new markets with the existing service offerings. Management is of the view that there is a lot of unmet demand for automation, energy efficiency systems and aftermarket services in South Asia and Middle East and providing significant growth potential to the company.