Today, Konsolidator signed a non-binding letter of intent (LoI) to open a sales office in Madrid covering Spain and Portugal – the Iberian market.
The office will be led by a Spanish country manager and his sales team, who have extensive experience in selling financial integration software. The final agreement is expected to be finalized in March 2024 and operations to begin on April 1, 2024.
The business plan describes the staffing of 5-7 employees located in Madrid, covering all sales and marketing activities in Spain and Portugal. The business plan for Iberia is based on the expectation that annual recurring revenue will increase by more than DKK 2 million per year after a 3-month start-up phase.
Additionally, the deal creates an opportunity for Konsolidator to begin selling Konsoldator® in South America.
The final deal is expected to be finalized in March 2024, which involves a company based in Spain with Konsolidator A/S holding 60% and the remaining shares owned by the local administration. The potential investment will negatively impact EBIT in 2024 by DKK 1-2 million. The operations and establishment of the subsidiary have a cash flow requirement of approximately DKK 1-2 million in 2024 and will be included in the estimates for a capital increase in the second quarter of 2024 as reported in the 2023 Annual Report.
Konsolidator expects the new company’s operations to be cash flow positive after 2-3 years.
The deal is part of Konsolidator’s growth opportunities for 2024 and will not impact Konsolidator’s ARR and revenue guidance for 2024. However, the opportunity is expected to positively impact ARR, revenue and EBIT when we look ahead from 2024.
Claus Finderup Grove, CEO at Konsolidator comments:
“With this Letter of Intent, we are working with people who we know have high expertise in financial consolidation together with a local presence in the Iberian region. This partnership is an exciting growth opportunity that could ultimately open the doors to the South American markets.”