23/10/2007 - 22:00

IPO for not-for-profit centre

23/10/2007 - 22:00

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Perth-based Centre for Association Management Pty Ltd is preparing to expand its services for the not-for-profit sector by undertaking a $2.5 million initial public offer.

Perth-based Centre for Association Management Pty Ltd is preparing to expand its services for the not-for-profit sector by undertaking a $2.5 million initial public offer.

The company, which provides back-office support and management services to nearly 30 not-for-profit organisations in Western Australia, is using its IPO to fund a resource centre for the not-for-profit sector.

It plans to list on the ASX as Promantec Ltd on November 30. The offer is expected to be taken up by the centre’s existing clients, the majority of which are professional associations.

Centre for Association Management director and co-founder, Ron Adams, said every not-for-profit organisation with functions that could be outsourced was a potential client.

“There are 700,000 not-for-profit organisations in Australia, worth $80 billion,” Mr Adams said.

“You can probably take out about 350,000 organisations that are small sporting clubs and the like, which leaves us with around 350,000 organisations that are our market.”

The company’s IPO will provide capital to expand its core administration, events management and training services, and will allow for a registered training organisation and recruitment arm to be established.

It will also fund a new resource centre to provide not-for-profits with advice on industrial relations, occupational health and safety and corporate governance issues.

Clients will pay a $500 membership fee to have unlimited access to the company’s services, which Mr Adams said was cheaper than membership of other industry bodies.

He said regulatory changes in the not-for-profit sector, including new personal liability and reporting requirements, would ensure there was a growing demand for the company’s services.

“There’ll be a lot more pressure regarding compliance, and volunteers are disappearing,” he said.

“The time is right for us – it’s only going to get more demanding.”

Mr Adams said Promantec’s main revenue stream would be its training, technology and events management arms.

“The administration service gets us the clients and gives us a base to work with, then we value add (with training and events management) for the rest,” he said.

The company plans to set up in every state. It is considering a number of acquisitions in the association management industry nationally, and has approached several companies to date. “We’re looking at about half a dozen small organisations that we can lock into,” Mr Adams said.

The original company, Comprehensive Services Group, was established by Mr Adams in 1992, after he was approached by the Institute of Credit Management to provide management services.

In 1999, the company joined with fellow association management company, Go Secretary Direct, before officially merging as the Centre for Association Management in 2002.

Promantec will have a board of four directors from the not-for-profit sector, including Mr Adams as managing director and chairman.

“The objective would be to get the first three years in place and then look at going back to do a further capital raising,” Mr Adams said.

“We really have to ensure we give a return to our shareholders, so we’re keeping salaries at the same level and we’re keeping directors fees at a minimum.”

Mr Adams said the company raised the $400,000 required for due diligence within two days and had received expressions of interest in the IPO from a number of its clients.

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