Watchlist...Topicus Com Inc...TOI on the TSX

 Watchlist...Topicus Com Inc...TOI on the TSX

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Overview

We acquire, manage and build vertical market software (“VMS”) businesses, primarily located in Europe. Generally, these businesses provide mission critical software solutions that address the specific needs of our customers in particular vertical markets. Our focus on acquiring businesses with growth potential, managing them well and then building them, has allowed us to generate significant cash flows and revenue growth during the past several years.

Our revenue consists primarily of software license fees, maintenance and other recurring fees, professional service fees and hardware sales. Software license revenue is comprised of license fees charged for the use of our software products generally licensed under multiple-year or perpetual arrangements. Maintenance and other recurring revenue primarily consists of fees charged for customer support on our software products post-delivery and also includes, to a lesser extent, recurring fees derived from software as a service, subscriptions, combined software/support contracts, transaction-related revenues, and hosted products. Maintenance and other recurring fee arrangements generally include rights to certain product updates “when and if available”. Professional service revenue consists of fees charged for implementation and integration services, customized programming, product training and consulting. Hardware sales include the resale of third party hardware that forms part of our customer solutions, as well as sales of customized hardware assembled internally. Our customers typically purchase a combination of software, maintenance, professional services and hardware, although the type, mix and quantity of each vary by customer and by product.

Expenses consist primarily of staff costs, the cost of hardware, third party licenses, maintenance and professional services to fulfill our customer arrangements, travel and occupancy costs, depreciation and other general operating expenses.

Corporate Reorganization and Acquisition of Topicus.com B.V.

On January 4, 2021, Topicus completed a corporate reorganization (the “Combination”) pursuant to which it acquired a controlling interest in Topicus.com Coöperatief U.A. (“Topicus Coop”) (formerly named Constellation Software Netherlands Holding Coöperatief U.A. (“CSNH”)). Topicus Coop is an entity incorporated and domiciled in the Netherlands and, prior to the Combination, was controlled by Constellation Software Inc. (“CSI”), Topicus’ parent company and controlling shareholder. The Combination was completed between entities under common control and Topicus has recorded the Combination at carrying value of the net assets recorded in the financial statements of Topicus Coop. Topicus has amended its comparative financial information to reflect the Combination as if it had occurred before the start of the earliest period presented.

In conjunction with the Combination, Topicus issued 1 super voting share (the “Super Voting Share”), 39,412,385 preferred shares (the “Preferred Shares”) and 39,412,385 subordinate voting shares (the “Subordinate Voting Shares”) to CSI. CSI then distributed 39,412,367 Subordinate Voting Shares of Topicus to its shareholders pursuant to a dividend-in-kind previously declared. In addition, Topicus Coop issued 19,665,642 preference units (“Topicus Coop Preference Units”) and 19,665,642 ordinary units (“Topicus Coop Ordinary Units”) to Joday Investments II B.V. and certain individual investors affiliated therewith (being the previous minority owners of CSNH) (collectively known as the “Joday Group”). Topicus has reflected this capital reorganization as if it had occurred on the starting date of the earliest period presented for purposes of Topicus’ basic and diluted earnings per share calculation.

On January 5, 2021, the Company acquired 100% of the shares of Topicus.com B.V. from Ijssel B.V. (“Ijssel”). The Company paid cash of €133.6 million to Ijssel. Furthermore, the Company issued 5,842,882 Topicus Coop preference units to Ijssel for an initial subscription price of €83.8 million plus an additional subscription amount of €27.6 million which was paid by Ijssel to the Company in May 2021. The Company also issued 5,842,882 Topicus Coop Ordinary Units to Ijssel. The aggregate total consideration totalled €217.4 million.

The condensed consolidated interim financial statements of Topicus as at and for the three and six month periods ended June 30, 2021 and June 30, 2020 comprise Topicus, Topicus Coop and its subsidiaries (together referred to as the "Company") and the Company's interest in associates. Topicus’ principal subsidiary is Topicus Coop and Topicus has a common equity interest of 61.41% in Topicus Coop with 38.59% being owned by the noncontrolling interests. 

Non-controlling interests

The Company’s non-controlling interest at June 30, 2021 is associated with Topicus Coop, an entity domiciled in the Netherlands. Topicus Coop’s equity consists of Topicus Coop Ordinary Units. There are currently 64,920,909 Topicus Coop Ordinary Units outstanding, which are held by Topicus Coop’s unitholders as follows:

• Topicus: 39,870,435 Topicus Coop Ordinary Units, representing 61.41% equity ownership.

• Joday Group: 19,665,642 Topicus Coop Ordinary Units, representing 30.29% equity ownership.

• Ijssel: 5,384,832 Topicus Coop Ordinary Units, representing 8.29% equity ownership.

All of the Topicus Coop Ordinary Units held by the Joday Group and Ijssel (collectively the “Topicus Coop Exchangeable Units”) are exchangeable, directly or indirectly, for Subordinate Voting Shares. The Topicus Coop Exchangeable Units comprise non-controlling interests in Topicus Coop. 

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MANAGEMENT’S DISCUSSION AND ANALYSIS (“MD&A”)...August 4, 2021

Source

https://www.sedar.com/DisplayCompanyDocuments.do?lang=EN&issuerNo=00050502