# Defenx PLC Q&A with CFO Philipp Prince & UK Bond Network CEO Christopher Maule

- Link: https://www.directorstalkinterviews.com/defenx-plc-qa-ceo-philipp-prince-uk-bond-network-ceo-christopher-maule/412733546
- Published: 2017-08-14T08:30:25+01:00
- Author: Amilia Stone

**Defenx PLC** (LON:DFX) Chief Financial Officer Philipp Prince and UK Bond Network
Chief Executive Officer Christopher Maule caught up with DirectorsTalk for an exclusive
interview to discuss funding through the UK Bond Network

 

**Q1: Now, Philipp, if I can start off with you, what interested Defenx PLC in the
UK Bond Network as opposed to choosing a route to raise equity more traditionally?**

**A1**: Well, as you’ve seen this week, we’ve done a combination of the two, creating
the right debt and equity mix is important to us, each has its advantages and disadvantages.
We started to incorporate debt into our mix last year as we disclosed in the 2016
Annual Report with the acquisition of Memopal in Italy and its low-cost local debt.

We approached UK Bond Network because of their ability and willingness to underwrite
a proportion of the bond, that means that we were able to get a market with certainty
that we would raise money and of course, they’ve been very flexible with the structuring
of their instrument. Finally, the auction process we believe should yield a sensible
price for the debt.

 

**Q2: So, why the fundraise now?**

**A2**: I’d say three reasons really, everybody knows that cyber security is a hot
sector, it’s very active at the moment and there are huge opportunities.

The recent ransomware attacks, like WannaCry, have added publicity to an issue that’s
already high on Board agendas and Defenx really want to capitalise on that positive
sentiment to continue to grow rapidly and profitably.

Leading into corporate customers is the next stage of that, our association with
BV Tech, our strategic partnership that was announced in April, gives us access 
to corporate customers and raising this money means we can develop the product that
those customers want, to accelerate that growth more quickly than we could do on
our own and as you now, timing is everything.

Next summer, May, the EU’s Data Protection Regulations comes into place and that’s
creating a time limit opportunity that we want to exploit. Market seasonality means
we really want to invest now to maintain the momentum we’ve got into the really 
busy second half of the year.

So, those are the reasons we’re raising the money now.

 

**Q3: What will Defenx be using the proceeds of the fundraise for?**

**A3**: Well, we’ve got a coordinated 12-month investment plan, putting various 
components together to ensure that we deliver that acceleration in our revenue on
a profitable basis. The key component is around €3 million into our product portfolio,
notably corporate versions, as I said, of our software for example, things like 
encrypted cloud back-up. We’ll then be putting small amounts into delivering sales
capacity, that’s people, primarily in Italy to start with to serve those corporate
customers and a modest amount into some features in marketing so that we create 
end-user engagement and drive renewals of our existing customer base.

 

**Q4: Chris, what attracted the UK Bond Network to working with Defenx PLC?**

**A4**: I think, initially, one of the main reasons was the fact that they’re operating
in a sector, as Philipp says, is particularly hot at the moment and one that we 
find very interesting and where we believe there is a strong growth opportunity 
and importantly, we believe that the management are both well positioned and capable
of executing this. We’ve actually been following the company since their IPO and
opened a dialogue with them, perhaps a year or so now, and at the time collectively
decided that it was an opportunity that was probably best revisited a bit further
down the line. In that period in between, it’s been great to see that they’ve continued
to perform and deliver as a business ranging from adding additional channel partners
to the successful integration of Memopal to moving to what is their fifth year of
what is profitable growth and delighted to know have managed to conclude a transaction
with them.

 

**Q5: So, why do you think your type of funding can better support a growing business
over the more traditional equity?**

**A5**: Again, to echo some of the reasons that Philipp’s mentioned himself, I think
it’s the overall flexibility that we’re able to provide companies like Defenx and
that’s really driven by the fact that there is a genuine desire to understand the
underlying business and use that knowledge to propose a tailored funding solution
rather than something off the shelf or more cookie-cutter. I think the fact that
the convertible, which is very attractive to our investors in terms of giving them
optionality to convert the bond into shares at £2, back to the point about the convertible
and it being priced at the placing obviously offers a lower level of dilution to
the business than it would through a straight equity issue. I think this is an appeal
alongside the fact that we can provide certainty of funding through our underwriter
which gives all parties the knowledge that the transaction will complete within 
a certain funding range.

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