Mainboard listed Procurri looks to become a global player

Singapore

SEAN Murphy, chief executive officer of Procurri Corp, has a vision of building a global aggregator of enterprise hardware and services that provides seamless convergence between technology, finance and logistics domains for its clients.

The Singapore-listed provider of data centre equipment and maintenance services was incorporated in 2013. Mr Murphy said that Procurri aims to unlock opportunities in the industry by changing the way the world buys technology through a sharing platform.

The company specialises in supplying data centre equipment across major IT brands and matching buy/sell opportunities between original equipment manufacturers (OEMs), resellers, hardware brokers and cloud companies. It also offers IT maintenance solutions independent of OEM service level agreements, and aids customers with refurbishment and disposal of their IT assets, including data destruction.

Its peers in the hardware and maintenance services segment include New York Stock Exchange-listed Avnet Inc, Ingram Micro Inc and Arrow Electronics Inc, as well as Beijing Trust & Far Technology Co Ltd, which trades on the Shenzhen Stock Exchange.

Mr Murphy noted that the IT industry has always been dominated by a handful of brand-name manufacturers, including IBM, Dell and Hewlett Packard (HP), each with its own global network of resellers and vendors. So, a large corporation with say, 50 offices worldwide, would have to grapple with a plethora of suppliers - perhaps 20 vendors for hardware, and another 20 or 30 for software and other services, he said.

The enterprises of today, however, are increasingly brand-agnostic, focusing on cost-effective and quality IT hardware. They prefer to extend the life of their IT infrastructure by using pre-owned equipment, as well as opting for independent maintenance services, to capture up to 60 per cent in cost savings, he added.

"It's about embracing challenges, solving problems and taking risks. And most of all, it shows that no matter where you come from, what your background is, you can achieve tremendous success if you are willing to work for it."

Talking about his company Mr Murphy said: "Procurri is not a short-term play - we're here for the long haul. Some of the clients we serve are among the biggest companies in the world, and if we do a good job, we're going to be very large and very profitable."

His vision is shared by long-time friend and business partner Vesmond Wong. Mr Wong is the chairman and group CEO of IT incubator DeClout Ltd, which is listed on Singapore Exchange's (SGX) Catalist board.

Procurri, with a market capitalisation of about S$110 million, made its trading debut on the SGX on July 20, 2016, and was the sole technology IPO (initial public offering) on the mainboard last year. DeClout, its largest shareholder, has a 47.26 per cent stake. The company's annual revenues expanded to S$122.8 million in 2015 from S$28.4 million in 2013, representing a three-year compounded annual growth rate (CAGR) of 108 per cent. Net profit grew to S$8.8 million from S$2 million over the period, reflecting a three-year CAGR of 112 per cent.

"We're trying to build a business designed around what the customer wants, using leading-edge technologies and 21st century tools, whereas many of our competitors are still saddled with legacy systems and commoditised products," Mr Murphy noted.

According to him, the company aims to capture as many opportunities as possible within the US$30 billion industry. "We want to be the world leader in the three businesses of hardware, maintenance and life-cycle services, across the continents of North America, Europe and Asia. To do that, we need to embark on an aggressive acquisition strategy over the next one-and-a-half to two years," Mr Murphy noted.

Procurri's first post-IPO acquisition - completed last November - was EAF Supply Chain Holdings, a supplier of IT spare parts. The purchase, which cost £1.5 million (S$2.7 million), was fully funded from IPO proceeds. It augments cross-selling opportunities within the enlarged group, and aligns with Procurri's plan to boost the higher margin life-cycle services business.

"Procurri is already a sales dynamo, so we're now focused on getting the highest calibre engineering talent. Asia is the only place within the group that is strategy-complete at this time, and rightly so, because in the next 10 years, all the excitement in IT will be in this region . . . This is also why we chose Singapore as our Asian headquarters and listing location," Mr Murphy said.

The global hardware resale market is forecast to grow revenues to US$34.8 billion in 2020 - registering a five-year CAGR of 16.9 per cent, according to data from Frost & Sullivan. The global independent maintenance services market is projected to expand revenues by a five-year CAGR of 15.7 per cent to US$4.4 billion by 2020, while the IT asset disposition market is seen increasing revenues to US$17.1 billion - a CAGR of 21.5 per cent - over the same period.

"Our vision is in place, along with a strong management bench - each one of us has more than two decades of industry experience," Mr Murphy said.

The capital - net proceeds of S$34.6 million from the Singapore IPO - is already in the bag. "From now until 2018, it's an execution story," he added.