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VECTION TECHNOLOGIES LTD — Investor Presentation 2020
Mar 11, 2020
66017_rns_2020-03-11_ff4dedb0-9109-40b1-96f4-63dc6b02a6e4.pdf
Investor Presentation
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Vection Technologies Ltd (ASX:VR1)
Real-Time Technologies for digital transformation Introducing the acquisition of Mindesk: Real-Time platform for 3D CAD
March 2020
ABOUT VECTION
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WHO WE ARE
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Vection is a multinational software company that focuses on real-time technologies for industrial companies’ digital transformation. Through a combination of our 3D, Virtual Reality, Augmented Reality, Industrial IoT and CAD solutions , Vection helps companies and organisations to innovate, collaborate and create value.
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WHAT WE HAVE DONE
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Vection has continuously implemented and delivered on its growth strategy to build a 360° software product suite to assist industrial companies in their journey towards Industry 4.0, driving growth and creating value for all stakeholders: Vection’s real-time solutions enable remote collaboration across stakeholders, ensuring business continuity for companies globally.
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ACQUISITION RATIONALE
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The acquisition of Mindesk represents a strong acceleration in the evolution of Vection’s CAD strategy to make design projects more accessible . Mindesk introduces the possibility to design a CAD project from scratch in Virtual Reality. Vection and Mindesk bring together significant client access , with best-in-class partnerships .
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WHERE TO NEXT
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Continued strong focus on Vection’s software product suite industry adoption growth and geographical footprint expansion across key regions and market segments to ensure value creation for Vection’s stakeholders.
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ACQUISITION OF MINDESK
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Backed by HTC , and endorsed by major technology companies globally, Mindesk introduces strong differentiation and growth across commercial CAD software for the Architecture, Engineering and Construction (AEC) industries.
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DELIVERING ON OUR STRATEGY
ASX LISTING
OPERATIONAL TRANSFORMATION
The Company lists on the Australian Securities Exchange (ASX) to revolutionise the way businesses manage their transactions.
The Company renews its Board of Directors to implement a transformational strategy towards a Software as a Service (SaaS) product offering supported by significant industry expertise.
The Company divests its interests in the real estate, settlement and finance divisions to ASX-listed The Agency Group Australia Ltd, to focus on its software product offering.
The Company acquires 3D, Virtual Reality (VR) and Augmented Reality (AR) software company, Vection, to drive differentiation and growth across real-time technologies for companies’ digital transformation.
MAR-2017
NOV-2017 FEB-2018 APR-2019
BUILDING A 360° SOFTWARE PRODUCT SUITE FOR INDUSTRY 4.0
The Company changes name to ● Vection launches its collaborative VR Vection acquires HTC backed Mindesk, Vection Technologies Ltd (ASX:VR1), design platform, FrameS, across its the developer of the first Software as to reflect its strategic direction to European distribution network. a Service (SaaS) real-time 3D design build a 360° software product suite ● Vection records ~$2m 1H FY20 platform that combines Computer for Industry 4.0. revenue up by 329% over the previous Aided Design (CAD) with Virtual Reality year’s corresponding period. and graphic engines. NOV-2019 DEC-2019 MAR-2020
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INTRODUCING MINDESK
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Powerful design tool
for strong differentiation
and growth across
commercial CAD software
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BUILDING A 360° SOFTWARE PRODUCT SUITE FOR INDUSTRY 4.0
With the addition of Mindesk, Vection is now accelerating on its By combining Mindesk’s engineering and design solutions to Vection’s commercial growth strategy to bring to market a 360° suite of software current product suite, Vection can establish itself as the technology partner solutions addressing companies’ digital transformation needs: from for companies looking to transform their workflows and processes . design and engineering, to marketing and sales.
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DESIGN & ENGINEERING
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Real-time technologies enable a faster, more efficient and affordable design process. MAINTENANCE MANUFACTURING Real-time technologies help save time Optimizing plant and asset workflows by providing additional information management: real-time technologies and assisting workers in machine reduce costs, increase products' quality operations. and ensure work safety. MARKETING & SALES TRAINING Immersive, realistic and customizable Immersive real-time technologies product presentations improve enable more dynamic and communication and engagement with cost-effective training and induction customers. programs.
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BUILDING OUR SOFTWARE PRODUCT SUITE
The addition of Mindesk to Vection’s existing software product suite is highly strategic in the acceleration of Vection SaaS CAD strategy , unlocking tremendous value for engineers, architects and designers in the initial phases of product development.
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*
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* Rendering of product suite launching 2020
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FRAMES + MINDESK: REAL-TIME PLATFORMS FOR DIGITAL TRANSFORMATION
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Engaging Sales tool
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Best-in-class Training tool
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CAD Engineering and design in VR from scratch
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Cloud collaboration with desktop CAD users
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Real-time rendering
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Pearly Chen - Vice President of Business Development at HTC
“ We are grateful to have had the opportunity to back Mindesk since their early days and share the team’s excitement about the possibilities this acquisition could unleash for Vection Technologies and their customers globally. We are firm believers of the many positive ways virtual reality will transform how we work, collaborate, and connect with one another. It is great to see validation of Mindesk’s vision of accelerating productivity with real-time technologies and we look forward to supporting their joined journey onwards as a new shareholder of Vection Technologies .”
Denis O’Keeffe , Logitech Director of VR/AR Program
“Logitech VR Ink now works with Mindesk, and we are super excited to have Mindesk as a Logitech partner. Mindesk and VR Ink create a powerful combination where you can edit and create, for Rhino and Solidworks, content with precision and control directly within VR.”
Ken Pimentel, Epic Games AEC Industry Manager
“Epic Games is happy to see Mindesk take the next step in using Epic’s Unreal Engine to innovate how manufacturers and architects can use real-time interaction as part of their design process."
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OVERVIEW
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Mindesk is a Real-Time 3D design platform that integrates with existing commercial CAD software to extend their operations to Virtual Reality and Augmented Reality.
Mindesk introduces the possibility to design a CAD project from scratch in Virtual Reality.
Mindesk platform integrates directly with current CAD solutions and saves precious design steps: while the majority of VR CAD software commercially available require document exportation, Mindesk enables users to switch from VR to desktop seamlessly, while editing the project in real-time on either platform.
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OPPORTUNITY
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Following years of platform beta-testing, Mindesk launched its commercial-ready platforms to the market in 2019 , experiencing consistent sales growth despite a negligible marketing expenditure, representing a unique growth opportunity for Vection and its stakeholders.
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TECHNICAL FEATURES
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Mindesk is the only VR platform on the market that provides the bi-directional, real-time live link across multiple commercial CAD and design software:
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McNeel Rhinoceros 6
Dassault Solidworks 2018 and 2019
Rhinoceros is the leading 3D surface CAD. One of the most widespread parametric Appreciated among Naval, AEC and Automotive mechanical CAD software used by more than designers, it counts 1.5 million professional 6 million users worldwide , primarily for light users worldwide. mechanics, gadgets, appliances, automation It includes the parametric design editor and metalworks in general. Grasshopper , used by top designers, including Archistar studios.
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Epic Games Unreal Editor
Epic Games Unreal Engine is the most popular game engine . It powers massive productions like Final Fantasy 7 Remake and Fortnite. Recently, Epic Games has been retargeting Unreal Engine (“Unreal Studio”) for professional use, especially in the AEC CAD market segments . Unreal Studio is rapidly growing and currently counts over 300k professional users.
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USER ADOPTION - THE OPPORTUNITY
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With a market average conversion rate for SaaS platforms at ~4%1, Mindesk’s 1% conversion rate and downloads growth represent a significant unique opportunity for Vection to capitalise on an increased market exposure driving platform adoption growth .
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CURRENT ADDRESSABLE MARKET
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over
1.5 m 6.3 m 0.3 m
users users users
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1 https://www.linkedin.com/pulse/saas-conversion-rates-18-trial-paid-ratio-strategy-christiansen/
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TIER 1 CLIENTS
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FINANCIAL PARTNERS
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TECH PARTNERS
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HTC is a Mindesk investor and continuously provides marketing support and industry connections to their enterprise network. For further information: vivex.vive.com/eu/
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Mindesk is one of the eight Logitech VR INK application available on launch day. VR INK is a first-generation VR stylus for enterprise, providing unprecedented precision over drawing and geometric control. For further information: logitech.com/en-roeu/promo/vr-ink.html
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As a Solidworks’ VAR network, web store and keep a direct line with their engineering team. For further information: solidworks.com/partner-product/mindesk
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Close collaboration with McNeel’s engineering team and access to Rhino’s marketplace, Food4Rhino. For further information: food4rhino.com
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CAD SOFTWARE MARKET
The intersection between CAD and VR/AR software and real-time rendering was valued at A$1.2 billion in 2019 , with an initial mixed reality adoption rate of 8%.
The adoption of these immersive technologies by professional users is set to more than double over the next three years to a total addressable market value of over A$3 billion in 2022 : a staggering 35.5% Compounded Annual Growth Rate (CAGR).
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Mindesk integrated CAD software, McNeel Rhinoceros and Dassault Systémes SolidWorks , have 1.5 and 6.3 million users respectively: ~18% of these users will potentially adopt VR and AR technologies in the short and medium term, representing an addressable market of more than 1.4 million professionals .
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OUR BUILDING BLOCKS FOR MARKET DOMINANCE
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GROWTH
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Strong focus on leveraging the existing distribution, online and
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PARTNERSHIPS direct sales network ● Geographical and market
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● Acceleration of development, expansion via an enlarged
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TECHNOLOGY OEM and distribution distribution footprint agreements with existing ● Global marketing and sales
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● Continued strong focus on technology and industrial initiatives to establish Vection proprietary real-time partners as the B2B real-time software technologies ● Acceleration of new strategic leader
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● Commitment on building a 360° partnerships with key ● Achieve market dominance SaaS product suite for Industry technology and industrial across Vection’s 360° SaaS 4.0 partners across Tier-1 regions product suite for Industry 4.0
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BOARD
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Gianmarco Biagi Managing Director, Vection Technologies
Experienced executive and board member of several Italian and multinational manufacturing corporations. Mr Biagi has a postgraduate degree in Engineering and a Master’s degree in Business and Strategic Management.
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Gianmarco Orgnoni Director & COO, Vection Technologies
Experienced executive across European and Australian private and publicly listed companies. Mr Orgnoni holds a bachelor’s degree in economics and Business Administration.
Lorenzo Biagi Director and CSO, Vection Technologies Experienced company manager in the private sector, with extensive knowledge in virtual reality technology, sales and cost control management.
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Bert Mondello
Chairman, Vection Technologies
Experienced executive with over 20 years’ experience across both the private and public sectors. Mr Mondello has substantial capital markets experience and knowledge of equity markets.
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Gabriele Sorrento Proposed Director, Vection and CEO, Mindesk
Fulbright Alumnus, M.Sc. in Architectural Engineering, 13+ years of experience in 3D CAD, previously worked with renowned architectural brands including Renzo Piano Building Workshop and Heller Manus Architects.
MANAGEMENT
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Andrea Bortolotti
CTO, Vection Technologies
15+ years of experience in the development of Virtual Reality, Augmented Reality and Mixed Reality solutions. Extensive knowledge in technology, game design and history.
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Alessandro Nones Head of R&D, Vection Technologies
Senior Developer and Manager, creator of multiple software programs published in major computer magazines. He holds the role of team leader in the development of FrameS.
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Dino Russo Head of Consulting, Vection Technologies
Senior Developer and Manager, degree in Computer Science, 15+ years of experience as Software Architect. He is specialist in CAD data exchange, he leads the development operations of custom projects.
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Vittorio Bava
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Head of Saas, Mindesk
Serial founder with experience in startups in food tech and consumer internet, he started his career at Google as a tech analyst. He holds a Msc. in international management from ESADE, Barcelona, and a Bsc. in business administration from Bocconi University, Milan.
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Sergio Giorgio CTO, Mindesk
37+ years of experience in the development of automation, gaming, 3D graphics and artificial Intelligence software. Previously worked for Alstom Ferroviaria (10 years) as Senior Architect and Developer. Developed and managed the national and regional system for the railways.
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Current Capital Structure Post-Acquisition Capital Structure
| Share Price1: 2.3¢ |
Share Price1: 2.3¢ |
Share Price1: 2.3¢ |
Share Price1: 2.3¢ |
Share Price1: 2.3¢ |
|---|---|---|---|---|
| Shares on Issue2: 657.2M |
Shares on Issue2: 822.7M |
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| Market Capitalisation: | $15.1M | Market Capitalisation: $18.9M |
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| Cash3: $0.3M |
Pro-Forma Cash3,5: | $1.5M | ||
| Debt4: - |
Debt4: - |
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| Enterprise Value: $14.8M |
Pro-Forma Enterprise Value: $17.4M |
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- 1 Share Price at 11 March 2020
2 Excludes any Deferred Consideration and/or Performance Rights and Options. 3 Cash balance at 31/12/19
4 Debt balance at 31/12/19, excluding commercial bank financing facility
- 5 Includes ~$1.2M net cash of Mindesk at completion.
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| ● 165,505,199 Vection fully paid ordinary shares (Shares) (Consideration Shares). |
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|---|---|---|---|---|---|---|---|---|
| Consideration: | ● Up to 108,000,000 Shares (Deferred Consideration) subject to multiple audited revenue milestones. For further information please see below. |
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| ● The issue of the Consideration Shares and the Deferred Consideration Shares is subject to approval of Vection’s shareholders. |
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| Conditions Precedent: Other Obligations: |
Settlement is subject to and conditional on the following conditions precedent: ● (Shareholder Approval) All shareholder approvals required by the Corporations Act and the ASX Listing Rules in order to proceed with and implement the acquisition of Mindesk; ● (Net Cash) Mindesk retaining Net Cash of~A$1.2M (€0.75M) at completion; ● (Escrow Agreements) Mindesk’s shareholders entering into restriction agreements in respect of the Consideration Shares held by the vendors for a period of 12 months from issue; ● (Employment Agreement) Various members of Mindesk’s management entering into contracting and/or employment agreements with Mindesk. Appointment of Mr Gabriele Sorrento to the Board of Directors of Vection as a Non-Executive Director |
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Deferred Consideration Overview: Mindesk vendors aligned with Vection’s strategy of value creation for all stakeholders.
| Case 1: Minimum Consideration | Case 1: Minimum Consideration | Case 1: Minimum Consideration | OR | Case 2: Maximum Consideration | Case 2: Maximum Consideration | Case 2: Maximum Consideration | |
|---|---|---|---|---|---|---|---|
| Deferred Consideration |
Mindesk Revenue |
Combined Revenue |
Deferred Consideration |
Mindesk Revenue |
Combined Revenue |
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| Deferred Consideration A | 8.0 M | Technology Milestone: development of a collaboration module for the Mindesk plugin for Rhino 6 on or prior to 31/12/2021. |
8.0 M | Technology Milestone: development of a collaboration module for the Mindesk plugin for Rhino 6 on or prior to 31/12/2021. |
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| Deferred Consideration B - 2020: | 9.0 M | $1.6 M | 20.0 M | $2.2 M | |||
| Deferred Consideration C – 2021: | 18.0 M | $4.9 M | 40.0 M | $7.4 M | |||
| Deferred Consideration D – 2021: | 2.0 M | $15.7 M | 5.0 M | $20.2 M | |||
| Deferred Consideration E – 2022: | 2.0 M | $25.3 M | 5.0 M | $33.7 M | |||
| Deferred Consideration F – 2023: | 15.0 M | $37.1 M | 15.0 M | $37.1 M | |||
| Deferred Consideration G – 2024: | 15.0 M | $40.8 M | 15.0 M | $40.8 M |
Notes: ● If targets are not met, Mindesk’s vendors will not receive any Deferred Consideration. ● Vection foresees that by 2021, multiple software products and services will be jointly developed and commercialised. Combined Revenue excludes any further acquisitions. ● AUD to EUR exchange rate of 0.5934 at 28 February 2020 (Source: Reserve Bank of Australia)
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| INDICATIVE TIMETABLE | INDICATIVE TIMETABLE | Completion of Acquisition 24 APRIL 2020 |
|
|---|---|---|---|
| 2 MARCH 2020 | 20 MARCH 2020 20 APRIL 2020 |
21 APRIL 2020 | |
| ASX Announcement of the Acquisition |
Despatch of Notice of Meeting for approval of issue of Shares as consideration for the Acquisition Meeting of Vection shareholders to approve the Acquisition |
Satisfaction (or waiver) of conditions precedent |
Notes:
● The above timetable is indicative only and subject to change.
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DELIVERING INCREMENTAL GROWTH
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Ability to Execute: Vection has continuously delivered on its growth strategy towards the creation of a 360° product suite for Industry 4.0.
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Market Trends: the increased adoption of collaborative real-time technologies including 3D, VR and AR will continue to drive growth opportunities for Vection, globally.
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Mindesk acquisition:
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Strategic Fit: Mindesk represents the next logical step in Vection’s overall evolution to a recurring SaaS revenue business model.
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Sales Growth Opportunity: with commercial platforms launched mid-2019, supported by a distribution footprint of 21 VARs across 3 continents and an established ecommerce online presence, Mindesk represents a unique growth opportunity for Vection.
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Technological Partners: partners such as Dassault Systémes, SolidWorks Corporation, McNeel, Autodesk, Epic Games, HP, Logitech and Varjo provide for significant visibility and commercial opportunities for Vection.
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Financial Partners: Vection’s proposed shareholders HTC Vive X, Primoglio SGR and A11 Venture represent an institutional blue chip shareholder base of global appeal.
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Technology Advantage : Vection’s proprietary 3D, Virtual Reality, Augmented Reality, Industrial IoT and CAD real-time solutions help companies and organisations to innovate, collaborate and create value.
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Value Growth : Vection remains committed to the achievement of continued incremental growth across its software product suite to ensure compounded value creation for all stakeholders.
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Partnerships and M&A : Vection will continue to pursue partnership and M&A opportunities to support its long-term vision of creating a 360° real-time software product suite for Industry 4.0 towards market dominance.
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VISIT OUR WEBSITES
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Vection.com.au Mindeskvr.com
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INVESTOR ENQUIRIES
Gianmarco Biagi - Managing Director (Europe Based) E: [email protected] P: +39 051 0142248 Gianmarco Orgnoni - Director and COO (Australia Based) E: [email protected] P: +618 6380 2555
THANK YOU
Vection Technologies Ltd (ASX:VR1)
Vection.com.au Mindeskvr.com
MEDIA ENQUIRIES [email protected] [email protected] Henry Kinstlinger - MMR Corporate E: [email protected] P: +61 418 613 028
OFFICES
Suite 1, 437 Roberts Road Subiaco WA 6008, Australia Vection Europe: Via Isonzo 61, 40033 Casalecchio di Reno (BO), Italy
Mindesk North America: 785 Market Street, #600 San Francisco CA 94103, USA