Argentine IT firm Globant has finally begun ‘book-building’ as part of its plan to float its shares on the New York Stock Exchange. The Buenos Aires-based firm has not, however, disclosed the precise date of its stock listing.
Globant, which had planned to launch its IPO in the first quarter of 2014, is aiming to raise in excess of $80 million. It is the 14th company from Argentina to be traded on the exchange but the first Argentinean technology firm to float shares in the U.S. capital market.
Globant’s revenue grew 26% to US$43.1 million in the first quarter of this year, while net profit rose to US$3.4 million. Analysts estimate the IPO would value the company at up to US$421 million.
For Globant, a vast majority of its revenue comes from North America. Therefore, analysts say, floating shares on the New York Stock Exchange will give a significant boost to its financial arm.
In its filing, the Argentine company said it would use the proceeds to pay debt and finance capital expenditures, strategic acquisitions and working capital. Underwriters include units of JPMorgan Chase & Co., Citigroup Inc. and Credit Suisse Group AG.
Globant is one of the most successful Argentine companies; it employs around 3,000 engineers, developers, marketing specialists and designers in 21 offices across 14 cities in Argentina, Brazil, Colombia, Uruguay, the United States and the United Kingdom.
Its client include American Express, Coca-Cola, Disney, Electronic Arts, Google, JP Morgan Chase & Co., LinkedIn, National Geographic and Zynga. Recently, the company has become one of the main ITO service providers in Latin America.
Given the company’s expanding overseas operation and rising profits, the IPO is likely to be a huge success. But economic uncertainties in Argentina may scare off some investors. Also, many analysts are not clear if the company needs to pay taxes in Argentina for the profits made overseas.
Argentina’s economy is in trouble, with the peso having plunged to a record low (it was devalued 20% in January alone). Rising inflation is likely to put pressure on the company to raise employee salaries.