Momentum Report - ATW Tech
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ATW Tech is a Montreal-based company that has transformed from providing HR solutions to becoming an international player in the carrier billing and text messaging markets. It has acquired several companies in these spaces, including VoxTel, a carrier billing company, and VuduMobile, a text messaging service. ATW Tech's goal is to build a large distribution network through carrier agreements around the world and acquire companies with strong carrier partnerships to distribute a variety of products and services. Recent financial results showed significant revenue growth and the company expects upcoming acquisitions to increase revenues to over $65 million.
Momentum Report - ATW Tech
- 1. MOMENTUM REPORTS — ATWTECH Report #2 — March, 2018 TSXV: ATW Share Structure : Issued : 79,107,606 Market Cap : 13,226,000 Looking Forward ATW Tech’s mission is to become the world leader in interactive communica- tions and monetization solutions through its inter-connectivity with telecommu- nications operators across the globe. With our various intellectual property, brands, partners, and licenses, we aim to provide our users worldwide with the most innovative and interactive commu- nication experiences. Montreal-based AtmanCo, (TSXV: ATW) has changed its name to ATWTech to better reflect its transformation from a sophisticated pro- vider of HR solutions, based on its scientifically validated proprietary psychometric personality test, into an international player in both the booming carrier billing and text messaging markets. Now operating as ATW Tech, the name change will become legal when it is voted on at the next annual general meeting on May 18, 2018. As a corporate structure ATW Tech will have several divisions made up by the original com- pany and by recent acquisitions, VoxTel, and VuduMobile. AtmanCo will continue to offer HR solutions and personality tests across a variety of platforms. Recent acquisitions include direct carrier billing company VoxTel and text messaging service VuduMobile. More are on the way as ATW Tech continues to build itself into a must-go-to international carrier billing powerhouse. Penetrating The Digital Economy: AtmanCo Rebrands As ATW Tech To Better Reflect Strategic Change A2P SMS Market to be Worth US$70.32 Billion by 2020 : Transparency Market Research Ovum Predicts International Carrier Billing Market To hit US$24.7 Billion by 2019 from US$14.5 Billion in 2014 Quebec Inc Heavyweights On Board
- 2. MOMENTUM REPORTS —ATWTECH — Report #2 — March, 2018 2 The company’s original name, AtmanCo, derives from Hindu philosophy and Atman can be translated as eternal self. As a HR personality test the Atman test has signifi- cant advantages. To begin with it is easy and fun. It also doesn’t require a psychologist to interpret the results. Finally it also matches personalities to see if they are compatible broadening its application to the mass market. The nature of the test makes it ideal for small to medium size companies that don’t have a dedicated HR department. AtmanCo has a well-established client base and grows on average by about 20% a year. AtmanCo’s long term goal is to monetize the results of millions of completed tests, changing the test results into the demographic “smart data”, that marketing and advertising agencies pay through the teeth for. The type of smart data that AtmanCo intends to offer represents a Holy Grail for the advertising and marketing industries. The Atman test was the old company which also happened to invest through R&D cash and has yet to turn a profit. ATW Tech is the new company and is now on the verge of becoming profitable. Just how much the company has changed can be seen by a string of recent announcements. On November 28th the company announced its name change to ATW Tech from AtmanCo and launched a new web site rebranding the companyintheinteractivetelecomtechspace. On November 23rd , ATWTech released its third quarterresultsshowingthatrevenuehadspiked 867% from a year earlier to reach $2.7 million. On November 13, ATWTech subsidiary VoxTel announced that it had signed a partnership agreement with Group V Media to provide cell and landline telephone voting services for two French language reality television shows, Occupation Double and Danser Pour Gagner. The company already provides voting services for the French versions of The Voice and The Voice Kids. AtmanCo was founded by President Michel Guay in 2004 to provide psychometric personality testing and applicant tracking for HR departments. Guay graduated from the University of Montreal in industrial psychology in 1984. He then spent seven years developing the Atman test, scientifically validating it and developing the web- based technology to support it.
- 3. MOMENTUM REPORTS —ATWTECH — Report #2 — March, 2018 3 In January, VoxTel also announced a partner- ship with Einsteinium to add the crypto-cur- rency to its payment solution platform. VoxTel had once been more profitable than it was when AtmanCo bought it. Disinterested and absentee owners had let the company run down. ATW Tech is in the process of reviving what some might see as a cash cow. “If you go back five years at VoxTel,” says ATW Tech CFO Simon Bedard, “just oneTV show, L’instant gagnant, brought in $5 million a year. It was huge. One or two TV programs can generate a lot of revenue.” “We hired a new vice-president of sales for VoxTel, who is well connected with many international TV producers here so he’s going to start the conversation. We are already in talks with TV producers about introducing interactive elements, voting, quizzes maybe product purchases. We have some projects on the table. It’s an area where we can grow rapidly.” On October 3rd the company completed its acquisition of VuduMobile, a text messaging service cutting edge platform with recurring revenues streams. True to form, one of the first things that ATW Tech did after purchasing VuduMobile was to beef ups its sales force with industry ex- perts. VuduMobile is a well-established text messaging service provider that manages bulk and individual text messages. It recently won a contract with Quebec’s Health Insurance Board, the Regie de L’Assurance-Maladie du Quebec, to run a trial in which patients will be alerted to their medical appointments by smart phone messaging. The company also has contracts with mu- nicipal governments and radio stations to provide communication services based on messaging as well as corporate clients who want the ability to reach their employees. It may be too early to say for sure but it looks as if a pattern is emerging in ATW Tech acquisitions. Once a company is firmly in the fold, ATW Tech ramps up the sales force with industry experts. “Everything that pertains to text messaging and alerting has a lot of potential. Text messages are read almost instantly, 93% are read within three minutes. Transportation is another area where we see opportunity. We are in discussions with the operators of a toll bridge. It’s much easier to pay through your cell phone but we could also develop a parking app or an app for airport parking as well.”
- 4. MOMENTUM REPORTS —ATWTECH — Report #2 — March, 2018 4 Telefonica, a Spanish telco that has ope rations in Europe, Central, South and North America, has predicted that the A2P SMS market, application to person, is expected to grow to 2.19 trillion messages generating US$50 billion in revenue by 2018. If this sounds exaggerated remember that Virgin Trains in England manages its rush hour consumer traffic through texting. Earlier in the year ATW Tech had announced that it was in the process of buying South American Buenos Aires-based carrier bill- ing business PlusMobile, headquartered in Buenos Aires with 2016 gross revenues of Cdn$14.5 million. The name change from AtmanCo to ATWTech marks the transformation of the company from the developer of a remarkably accurate and scientific psychometric personality test and HR solutions provider, into a company poised to catapult into an international carrier bil ling and interactive solutions provider with a dominant text messaging service division. “We changed the name because investors were confused. “People were still thinking of AtmanCo as a human resources player when in fact we have become an interactive tech company in the telecom and text messaging industries. We needed to rebrand to better reflect our evolved strategy and new reality.” AtmanCo started down the road that led to it becoming ATWTech in 2016 when it decided to acquire Quebec-based carrier billing business VoxTel because VoxTel owned and operated a successful online dating service named Quebec Rencontres. Quebec Rencontres used the Atman test to help match people and AtmanCo decided they could do a better job marketing the test if they controlled the company. They have announced the launch of its mobile app along with a partnership with Globalia to hep them with marketing and lead generation. Once AtmanCo took over VoxTel, which han- dles transactions like the voting in reality TV shows and purchases made over land and cell phone lines, as well as SMS alerts and marketing solutions, AtmanCo started to become ATW Tech. The carrier billing market is being driven by strong and persuasive factors. Chief among them is a seamless simplicity and instant convenience. People use carrier billing to buy smart phone apps, games, music and programming. Instead of entering banking information and passwords all the customer has to do is tap enter and the purchase is made with the payment added to the monthly phone bill. Bedard has an easier way of understanding what drives direct carrier billing, “We have an entire generation that is hooked on their smart phones.They live their life on their smart phones. They do everything on their phones.” AtmanCo is not the only one believing in the growth of the carrier billing market. An Ovum report on carrier billing market trends predicts that by 2019 the interna- tional market will be valued at US$24.7 billion, up from US$14.5 in 2014. “By working the VoxTel acquisition opportunity, we realized the huge potential of the booming carrier bill- ing and text messaging markets. More and more people are paying over the phone instead of by card or bank account, especially young people or people in less developed countries.”
- 5. MOMENTUM REPORTS —ATWTECH — Report #2 — March, 2018 5 For merchants, carrier billing provides the opportunity to do business with a clientele that doesn’t have either a credit or a bank card. In many parts of the world mobile pay- ment solutions act as a bank. A good way to think of this transformation is to see it as a transformative, interactive penetration of the developing digital economy. Tech giant Apple, for instance has rolled out direct carrier billing for its iTunes, App and iBooks stores in Belgium, Germany, Japan Norway, Russia, Saudi Arabia, Switzerland, Taiwan and the United Arab Emirates.Apple is also reported to have inked a deal for direct carrier billing in India. “Basically,” says Bedard, “we are building a distribution channel and the bigger the better.” The distribution channel will be used to sell a variety of products ranging from the licensed to the proprietary and there is a good chance that sooner or later a version of the Atman test will be available for download on a smart phone near you. Through VoxTel, AtmanCo already has car- rier billing agreements with Bell, Videotron, Rogers, Fido and Telus or a 97% Canadian market penetration. By purchasing PlusMobile, headquartered in Buenos Aires, the company is not only gaining a profitable company with revenues for 2016 at US$11.5 million, but a company that also has products and connec- tions AtmanCo wants. “What is important for us is their portfolio of products through a subscription revenue model and that they have 9 direct carrier billing agreements with carriers in South America including Argentina, Columbia, Uruguay and Peru and 16 indirect links, in six countries in Latin America.” PlusMobile’s product portfolio includes Discovery Channel products (i.e. language courses), kids, entertainment and quizzes products. When it comes to finding the best people for the job company founder Michel Guay has the ability to pull rabbits out of hats and this includes his board of directors. When he started thinking about buying VoxTel, Guay called up CGI co-founder Andre Imbeau and asked him if he would be interested in taking a look. Imbeau thought the acquisition looked promis- ing enough to invest $2 million and became a board member as did Renaud Caron who was Senior Vice President of Strategic Develop- ment at CGI Group Inc. Along with a distin- guished corporate career Carron has served as a deputy minister in both the Canadian and Quebec governments. Rounding out recent additions to the board has been Bertrand Leboeuf, a Montreal real estate and hotel mag- nate. CGI is a Montreal-based international information technology consulting company that had $10.7 billion in revenues during 2016. The PlusMobile acquisition is almost wrapped up and Bedard expects the agreement to be signed during the first quarter of 2018. “Once the PlusMobile acquisition is complete we have two other targets in carrier billing, one in the US and one in France. With those two acquisitions we will reach more than a hundred agreements with carriers and probably $65 million in revenues.”
- 6. “Michel,” says Bedard, “is very good at building relationships and a visionary leader.” Speaking of the new board members Bedard says, “It’s interesting because they believe in the busi- ness and they are very interested in helping us open doors and bringing us business. We are confident they will bring us some very valuable insights.” Bedard describes company strategy by saying, “Over the next two years we will build a distri- bution network through carrier agreements. We will acquire companies that have strong partnerships with carriers. This will then allow us to distribute a range of products that we will either develop ourselves or acquire the licenses to. The bigger the distribution channel, the better. The beauty of it all is that most of these products will offer us recurring revenue and are scalable.” Some of the products ATW Tech will be developing on its own may include quizzes, a smart phone version of the Atman test, dating services through Quebec Rencontres, toll bridge and parking services. PlusMobile has a variety of Spanish language content ranging from language courses to TV programming. The overall game plan would see PlusMobile’s Spanish language product and programming distributed in the southern U.S. Spanish spea king market through the looming American acquisition. The company’s most immediate upcoming milestone is closing the PlusMobile acquisi- tion which Bedard believes will take place in Q1 this year. Then there are the American and French carrier billing acquisitions. Equally important for CFO Bedard, is cleaning up the books. “I’m eager to be in the position to show two consecutive quarters of positive EBIDTA and positive cash flow generated from operations. I think we are getting to that. Of all the projects we have on the table, some are starting to monetize right now and some will start later this year. That’s our short- term goal-to show the market that we have changed from a company burning cash to a self-sufficient company in terms of cash flow.” DISCLAIMER - Momentum PR provides information only. This report does not constitute investment advice and should not be interpreted as such. TECHNOLOGY AND LIFE SCIENCE MINING AND MINERAL EXPLORATION OIL AND GAS, AND ENERGY SERVICES MOMENTUM PR | T: +1 450 332 6939 | E: INFO@MOMENTUMPR.COM | WWW.MOMENTUMPR.COM 6MOMENTUM REPORTS — ATMANCO — Report #2 — March, 2018