EX-99.1 27 a2208946zex-99_1.htm EX-99.1

Exhibit 99.1

CONFIDENTIAL TREATMENT REQUESTED

As confidentially submitted to the Securities and Exchange Commission on April 20, 2012.

Registration No. 333-            

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



FORM F-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



GFI Software S.à r.l.
(to be converted into GFI Software S.A.)
(Exact name of registrant as specified in its charter)

Luxembourg
(State or other jurisdiction of
incorporation or organization)
  7372
(Primary Standard Industrial
Classification Code Number)
  98-0631596
(I.R.S. Employer
Identification No.)

7A, rue Robert Stümper
L-2557 Luxembourg
Grand Duchy of Luxembourg
+352 2786-0231
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

GFI USA, Inc.
15300 Weston Parkway
Cary, NC 27513
(919) 297-1350
(Name, address, including zip code, and telephone number, including area code, of agent for service)



Copies to:

Gordon R. Caplan, Esq.
Gregory B. Astrachan, Esq.
Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, New York 10019
(212) 728-8000

 

William V. Fogg, Esq.
Andrew J. Pitts, Esq.
Cravath, Swaine & Moore LLP
825 Eighth Avenue
New York, New York 10019
(212) 474-1000

          Approximate date of commencement of proposed sale to the public:    As soon as practicable after the effective date of this Registration Statement.

          If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box.    o

          If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

          If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

          If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o



CALCULATION OF REGISTRATION FEE

       
 
Title of Securities
to Be Registered

  Proposed Maximum
Aggregate Offering
Price(1)(2)

  Amount of
Registration Fee

 

Common shares, nominal value €0.01

  $100,000,000   $11,460

 

(1)
Estimated solely for purposes of determining the registration fee in accordance with Rule 457(o) under the Securities Act of 1933, as amended.

(2)
Includes common shares that the underwriters have an option to purchase solely to cover over-allotments.



          The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall become effective on such date as the Commission acting pursuant to said Section 8(a), may determine.

   


PROSPECTUS (Subject to Completion)
Issued                             , 2012

The information in this prospectus is not complete and may be changed. Neither we nor the selling shareholders may sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and neither we nor the selling shareholders are soliciting offers to buy these securities in any jurisdiction where the offer or sale is not permitted.

GFI Software S.A.

COMMON SHARES



This is the initial public offering of GFI Software S.A., a joint stock company (société anonyme) existing under the laws of the Grand Duchy of Luxembourg. We are offering                             common shares, and the selling shareholders identified in this prospectus are offering                             common shares. We will not receive any proceeds from the sale of common shares offered by the selling shareholders. This is our initial public offering, and no public market currently exists for our common shares. We anticipate that the initial public offering price will be between $               and $               per common share. After the offering, the market price for our common shares may be outside this range.



We have applied to list our common shares on the               , subject to official notice of issuance, under the symbol "               ."

We are an "emerging growth company" under applicable Securities and Exchange Commission rules.



Investing in our common shares involves a high degree of risk. See "Risk Factors" beginning on page 14.



PRICE $     A SHARE



 
 
Price to
Public
 
Underwriting
Discounts and
Commissions
 
Proceeds to
GFI Software S.A.
 
Proceeds to
Selling
Shareholders

Per share

  $        $        $        $     

Total

  $                     $                     $                     $                  

The selling shareholders have granted the underwriters an option to purchase up to              additional common shares to cover over-allotments.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or determined if this prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the common shares to investors on or about                           , 2012.



MORGAN STANLEY

 

J.P. MORGAN

 

JEFFERIES



STIFEL NICOLAUS WEISEL

BMO CAPITAL MARKETS

OPPENHEIMER & CO.

   

The date of this prospectus is                           , 2012.


TABLE OF CONTENTS

 
  Page

Prospectus Summary

  1

The Offering

  9

Summary Consolidated Financial and Other Data

  10

Risk Factors

  14

Forward-Looking Statements and Industry Data

  41

Use of Proceeds

  43

Corporate Reorganization

  44

Dividend Policy

  45

Capitalization

  46

Dilution

  47

Selected Consolidated Financial Data

  48

Operating and Financial Review and Prospects

  53

Business

  89

Management

  102

Certain Transactions

  113

Principal and Selling Shareholders

  116

Description of Share Capital

  119

Shares Eligible for Future Sale

  130

Taxation

  132

Underwriters

  140

Service of Process and Enforceability of Civil Liabilities

  147

Legal Matters

  147

Experts

  147

Changes In Registrant's Certifying Accountant

  148

Where You Can Find Additional Information

  149

Expenses Related to This Offering

  150



        You should rely only on the information contained in this prospectus and any free writing prospectus prepared by or on behalf of us. We have not, and the selling shareholders and the underwriters have not, authorized anyone to provide you with different information. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information contained in this prospectus is accurate as of the date on the front of this prospectus, or other date stated in this prospectus, only. Our business, financial condition, results of operations and prospects may have changed since that date.

        Information contained in, on, or accessible through, our website does not constitute part of this prospectus.

        This prospectus has been prepared on the basis that all offers of common shares will be made pursuant to an exemption under the Prospectus Directive, as implemented in member states of the European Economic Area (each, a "Relevant Member State"), or "EEA," from the requirement to produce, have duly approved and publish a prospectus for offers of the common shares. Accordingly, any person making or intending to make any offer within the EEA of common shares which are the subject of the offering contemplated in this prospectus should only do so in circumstances in which no obligation arises for the sellers of the common shares or any of the underwriters to produce a prospectus for such offer. Neither the sellers of the common shares nor the underwriters have authorized, nor do they authorize, the making of any offer of common shares through any financial intermediary, other than offers made by the underwriters which constitute the final offering of common shares contemplated in this prospectus.

        The distribution of this prospectus or any free writing prospectus prepared by us in connection with this offering and the offering and sale of the common shares in certain jurisdictions may be restricted by law. Persons who receive this prospectus or any such free writing prospectus must inform themselves about and observe any such restrictions. This prospectus does not constitute an offer of, or an invitation to purchase, any of the common shares in any jurisdiction in which such offer or invitation would be unlawful.

        For the purposes of the two preceding paragraphs, the expression "an offer of shares" in relation to any common shares in any Relevant Member State means the communication in any form and by any

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means of sufficient information on the terms of the offer and the common shares to be offered so as to enable an investor to decide to purchase or subscribe to the common shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State. The expression "Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State) and includes any relevant implementing measure in the Relevant Member State. The expression "2010 PD Amending Directive" means Directive 2010/73/EU.

SPECIAL NOTE REGARDING OUR CORPORATE HISTORY AND THE PRESENTATION OF OUR FINANCIAL INFORMATION

        Our corporate existence began in 1999 when GFI Software LTD was formed as an international business company in the British Virgin Islands with operations in Malta. In May 2005, GFI Software LTD and its subsidiaries were indirectly acquired by GFI Acquisition Company Ltd., or "GFI Acquisition," an entity controlled by certain investment funds affiliated with Insight Venture Management, LLC, or "Insight," our majority shareholder.

        The registrant was formed in June 2009. In July 2009 certain other investment funds affiliated with Insight indirectly acquired control of the registrant and, through a series of transactions, the registrant became the parent holding company of TeamViewer GmbH and its affiliates.

        In November 2010, at the direction of Insight, GFI Acquisition was merged with and into the registrant. We refer to this transaction as the "Merger." The Merger resulted in the consolidation of GFI Acquisition and its subsidiaries and the registrant and its subsidiaries under one organizational structure.

        Because both GFI Acquisition and the registrant had been under the common control of Insight since July 2009, the Merger is considered for accounting purposes to be a reorganization of entities under common control and the pooling of interest method of accounting has been used in the presentation of our consolidated financial statements. Accordingly, our consolidated financial statements present our results and changes in equity as if the Merger had occurred upon Insight's acquisition of the registrant on July 29, 2009. For periods prior to Insight's acquisition of the registrant, our financial statements present the consolidated results and changes in equity solely of GFI Acquisition and its subsidiaries.

        Unless the context requires otherwise, references to "GFI," the "Company," "we," "our" and "us" in this prospectus refer to GFI Software S.à r.l. and its subsidiaries on a consolidated basis prior to the completion of our corporate reorganization and to GFI Software S.A. and its subsidiaries on a consolidated basis as of the completion of our corporate reorganization and thereafter. References to the "registrant" refer solely to GFI Software S.à r.l. prior to the completion of the corporate reorganization and to GFI Software S.A. as of the completion of the corporate reorganization and thereafter, and references to the "Board" refer to our board of managers prior to the completion of the corporate reorganization and to our board of directors as of the completion of the corporate reorganization and thereafter. References to "dollar," "dollars," "U.S. dollars," or "$" in this prospectus are to the lawful currency of the United States of America, references to "euro," "euros" or "€" are to the single unified currency of the European Monetary Union, and references to "pound sterling," "pounds sterling" or "£" are to the official currency of the United Kingdom.

        Our customers include individual consumers and business customers. We define business customers as customers (other than individual consumers) that have purchased one or more of our products under a unique customer identification number within the past three years. In calculating the number of our customers, we include customers of businesses that we owned during the entire measurement period as well as customers of businesses acquired during the measurement period, assuming that we had owned those businesses throughout the entire measurement period.

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PROSPECTUS SUMMARY

        This summary highlights selected information contained elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our common shares. You should read the entire prospectus carefully, especially the risks related to our business, our industry and investing in our common shares that we describe under "Risk Factors," and our financial statements and the related notes included in this prospectus, before deciding to invest in our common shares.

GFI SOFTWARE S.A.

Overview

        We are a global provider of collaboration, IT infrastructure and managed service provider software solutions designed for small and medium-sized businesses, or "SMBs." Our solutions enable SMBs to easily manage, secure and access their IT infrastructure and business applications. SMBs currently face many challenges, including increasing IT complexity, intensifying security risks and greater workforce mobility. We address these challenges with simple yet powerful software solutions that are easily deployed and deliver significant value to our customers. Our high-volume go-to-market model simplifies the process for SMBs to discover, evaluate, procure and deploy our solutions. Our customer base has grown from over 89,000 business customers as of December 31, 2008 to over 244,000 business customers in over 180 countries as of December 31, 2011 and is highly diversified, with no single customer accounting for more than 1% of our total revenue in 2009, 2010 or 2011.

        SMBs spend a significant amount on IT and software annually. IDC estimates that the worldwide market for SMB spending on packaged software will grow from $132.5 billion in 2011 to $186.6 billion in 2016. Throughout our history, we have focused on the SMB market by delivering solutions that address the most prevalent problems, or "pain points," faced by SMBs. Our offerings are differentiated by their ease-of-use, rapid time-to-value, ease-of-deployment, focus on core customer challenges and excellent technical support. In response to emerging technology and market trends that impact our customers, we will seek to continue to expand our range of software solutions through internal development, partnerships with other technology providers and strategic acquisitions. We currently offer solutions in the following core markets:

    Collaboration. TeamViewer, our easy-to-use online collaboration product, has been activated on over 300 million devices. The product provides multi-user web-conferencing, desktop and file sharing and secure remote control and access to any Internet-connected device on which it is activated. TeamViewer is free for non-commercial use and must be purchased for commercial use—a freemium model that resulted in over 120 million TeamViewer activations during 2011. Growth in the number of TeamViewer users increases the value of the network, contributing to the increasing adoption of the product. This viral growth requires minimal investment in sales and marketing and results in low customer acquisition costs. We sold approximately 115,000 TeamViewer licenses and upgrades in 2011, as compared to approximately 74,000 and 48,000 such licenses and upgrades in 2010 and 2009, respectively.

    IT Infrastructure. Our IT infrastructure solutions enable SMBs to easily manage and secure their applications, networks and computing systems. Our solutions include, network monitoring, server and asset management, log management, web and email security, vulnerability assessment, antivirus, patch management and fax server software, and are offered through both on-premise and cloud-based deployment. Our products in the IT infrastructure market include GFI VIPRE Antivirus Business, GFI MailEssentials, GFI LanGuard, GFI FaxMaker and GFI MailArchiver.

    Managed Service Provider. GFI MAX, one of our cloud-based platforms, is licensed directly to managed service providers, or "MSPs," which include third-party service providers, IT support vendors, and certain value-added resellers, or "VARs," enabling them to configure, monitor, manage and secure

 

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    their customers' IT infrastructure through the cloud. GFI MAX provides MSPs with access to what we believe to be one of the industry's broadest and most affordable portfolios of managed services solutions. As of the end of 2011, approximately 5,200 MSPs licensed GFI MAX to manage 348,000 devices for their customers, as compared to approximately 3,600 MSPs and 2,200 MSPs managing 174,000 and 77,000 devices at the end of 2010 and 2009, respectively. In addition, the GFI MAX platform enables us to easily add and deliver our other products in a single, cohesive solution at a modest incremental fee—an approach that has led to a high rate of additional product adoption by MSPs.

        Our differentiated business model and global distribution platform allow us to cost-effectively sell to SMBs in nearly every region of the world. We operate a scalable, data-driven online marketing model targeted at the end-users of our solutions, using focused marketing campaigns to drive prospective customers to our websites and to our partners. In addition, we cost-effectively reach SMBs with fewer than 30 employees via MSPs, who are increasingly providing remote support services to smaller SMBs that often do not have their own in-house IT staff. We leverage blogs, social media and custom content sites to create online communities that enable our existing and prospective customers to connect directly and share information. Our customers purchase our solutions from our e-commerce sites, inside sales team and through channel partners. We offer downloadable, full-featured, free versions of most of our products for a designated trial period. This approach allows prospective customers to experience the full range of benefits of our solutions prior to making their initial purchase and distinguishes us from the high-cost, up-front sales approach employed by many enterprise software vendors.

        Our past financial performance has been characterized by significant Billings growth and strong operating cash flows. For the years ended December 31, 2011 and 2010, our Billings were $200.2 million and $143.5 million, respectively, representing year-over-year growth of 40%. We define our methodology for calculating Billings, a non-IFRS financial metric, and provide a reconciliation to the most comparable IFRS metric, revenue, under "Selected Consolidated Financial Data—Supplemental Information." A significant portion of our revenue in each fiscal period is associated with Billings from prior periods. See "Operating and Financial Review and Prospects—Financial Operations Overview—Revenue." For the years ended December 31, 2011 and 2010, we generated $120.1 million and $81.7 million of revenue, respectively. We generated cash flow from operations of $59.9 million and $55.0 million for the years ended December 31, 2011 and 2010, respectively. In 2011, approximately 41% of our Billings were derived from the Americas, 53% of our Billings were derived from Europe, the Middle East and Africa, and 6% of our Billings were derived from Asia-Pacific.

Our Industry

    Trends Driving Our Market Opportunity

        SMBs comprise an increasingly large and important part of the global economy. In a 2010 report, IDC estimated that there are approximately 73 million SMBs (defined as organizations with fewer than 1,000 employees) worldwide, which represents over 99% of all businesses. SMB spending on packaged software is forecast by IDC to grow from $132.5 billion in 2011 to $186.6 billion in 2016. As per a June 2011 IDC Report, the total worldwide packaged software market in 2011 was $307 billion, implying that SMB spending constitutes 43% of the total software market.

        In today's highly competitive global marketplace, SMBs are increasingly investing in IT to drive revenue growth, improve productivity and efficiency, and deliver superior products and services. High availability must be maintained for devices and systems on a business network, and they must perform efficiently at no or minimal additional cost to the business—a daunting challenge for IT administrators within SMBs. Despite their benefits, many existing IT solutions were designed to address the needs of larger enterprises and are often impractical to implement within SMBs due to the cost and complexity of procurement, deployment and ongoing maintenance. This increasingly complex technology environment

 

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for businesses has led to several key growth drivers that are speeding the adoption of SMB-tailored solutions:

        Increasingly Mobile and Connected Workforce Needs Anytime/Anywhere Collaboration Tools.    Workers are spending less time in traditional office environments and more time telecommuting and traveling, which is driving demand for remote connectivity and collaboration solutions. A December 2011 IDC report forecasts the global mobile worker population to increase from 1 billion in 2010 to 1.3 billion in 2015, representing approximately 37% of the projected 2015 worldwide workforce. We believe that this trend is likely to accelerate over time as younger employees, who are already accustomed to communicating via newer Internet-centric technologies, constitute a greater proportion of the global workforce.

        Proliferation of Internet-Enabled Devices.    A March 2012 IDC report estimates that there were 494 million smartphones shipped globally in 2011, and forecasts that number to increase to 1.2 billion in 2016, representing a compound annual growth rate, or "CAGR," of 19%. Furthermore, a December 2011 IDC report estimates that there were 20 million tablets in use globally in 2010, and forecasts that number to increase to 139 million in 2015, representing a CAGR of 48%. The proliferation of devices, which we believe is being driven in part by businesses increasingly adopting bring-your-own-device, or BYOD, strategies that allow users to utilize their personal devices in the workplace, is increasing the number of platforms that must be supported, managed and secured by SMBs.

        Increasing Adoption of Cloud-Based Solutions.    SMBs continue to expand their use of cloud computing services and SaaS solutions to reduce the time and costs associated with installing, configuring and maintaining traditional IT solutions. According to a March 2011 IDC report, SMB cloud computing spending will reach $31.7 billion by 2014. We believe that the rapid growth in cloud-based spending has been particularly strong for SMBs due to their limited IT staff and resources and their ability and willingness to quickly adopt new IT solutions on account of their smaller organizational size.

        Consumerization of IT.    Individuals are spending more time interacting with intuitive, easy-to-use web-based software and services that increase productivity and efficiency in their personal lives. These experiences have increased business users' expectations that they should be able to rapidly access, install and interact with powerful, easy-to-use corporate IT solutions without the need for training or professional services.

        Increasing Use of Managed Service Providers.    Many smaller SMBs rely on MSPs to manage their IT infrastructure. We believe there are approximately 250,000 VARs globally and that the percentage of VARs who are moving to an MSP business model is growing rapidly. We believe a significant trend among these MSPs is the increasing use of management platforms, such as our GFI MAX platform, that enable them to more efficiently provide integrated support and management of on-premise IT and cloud-based services.

        Increasing IT Security Threats.    The broad adoption by SMBs of cloud-based applications, wireless networks, portable storage and wireless devices has eroded traditional network boundaries and increased the risk of potential attacks. Malware threats have continued to increase in both number and complexity as hackers have become more sophisticated and motivated by the potential for illegally generated profits or the desire to cause disruption or reputational harm to the organizations they target.

        Rapid IT Adoption within Emerging Markets.    According to a Gartner March 2012 report, SMB IT spending in developing regions including Greater China, Emerging Asia-Pacific, Latin America, the Middle East and Africa will grow from $169.0 billion in 2011 to $253.7 billion in 2016. We believe that SMBs in emerging economies are more aggressively adopting new IT management solutions and cloud-based technologies because they have fewer legacy technology deployments implemented.

 

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    Limitations of Existing Solutions

        We believe that many competing solutions fail to meet the needs of SMBs due to a number of limitations:

        Product Complexity.    Traditional enterprise software vendors often sell highly complex solutions designed for large enterprises into the SMB market, such as enterprise-class management frameworks, that are unduly complex and impractical for smaller customers. These enterprise solutions are not designed to meet the unique needs of the SMB market and typically have many sophisticated features that are not required or desired by SMBs.

        Procurement Complexity.    The procurement of many enterprise software solutions requires significant time for solution design, pricing and contract negotiation and implementation. The process for identifying, evaluating and purchasing enterprise solutions can take several months and is often impractical for SMB customers.

        Total Cost of Ownership.    Enterprise software vendors often charge substantial license fees for their solutions, and can require significant hardware, training and professional services expenditures for initial deployment, and substantial maintenance and additional professional services costs in later years. The high total cost of ownership of enterprise solutions makes them uneconomical for many SMB customers.

        Poor Customer Service and Support.    We believe that SMB customers often receive inadequate technical support from enterprise software vendors due to the smaller size and associated revenue of their software deployments. Similarly, smaller software vendors often lack the resources to meet their customers' support needs.

        Lack of Product Integration.    Many of our competitors in the SMB space have assembled their solutions through acquisition but have made limited or no progress in integrating the acquired products and technologies or in streamlining their product lines. This lack of integration results in a fragmented user experience and frustrates the ability to identify complementary product offerings, thereby limiting the value delivered to the customer.

Our Solutions

        We have designed our solutions to enable SMBs to easily and cost-effectively monitor, manage and secure their IT infrastructure and business applications. In addition, our solutions enable users to collaborate with geographically dispersed employees, partners and customers, and to remotely access their other devices. We believe that the key differentiators of our solutions include:

        Purpose-built Solutions for SMBs.    By focusing on SMBs, we believe that we better understand their requirements and more effectively deliver highly differentiated technology to address their needs across multiple product categories. Our highly collaborative customer relationships provide valuable feedback about our solutions and such customers' prevalent pain points, which helps guide our internal product development efforts and acquisition strategy. In addition, we have invested extensively in customer service and support to provide helpful and timely responses to inquiries from SMB customers located throughout the world.

        Highly Intuitive Software.    The easy-to-use and intuitive interfaces of our solutions not only provide the specific functionality that our customers require, but also accelerate their adoption. We believe our intuitive solutions reduce our customers' need for training and installation services and, combined with their rapid deployment time, drive immediate realization of value from our solutions.

        Low Total Cost of Ownership.    Our solutions have a low up-front average selling price, generally between $200 and $1,200, to decrease procurement risk and reduce the length of the sales cycle. Our solutions can be downloaded and implemented in a self-service manner and are designed so that they do

 

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not require professional services, which accelerates time-to-value and reduces total cost of ownership for our customers. Furthermore, our cloud-based solutions allow our customers to quickly and easily begin utilizing our solutions and reduce the cost of implementation related to hardware and IT staff that are typically required to install and support traditional on-premise software solutions.

        SaaS Platform Approach.    We offer a cloud-based, software-as-a-service, or "SaaS," platform that allows customers to implement our solutions in a modular fashion, enabling them to rapidly solve immediate business needs. Customers can access additional functionality in a highly streamlined manner as their needs evolve. We have demonstrated our ability to integrate disparate technologies effectively, initially in our GFI MAX platform, which has expanded from originally serving as a remote monitoring solution to including remote control, antivirus and patch management functionality, and we expect to use the same approach to deliver our forthcoming end-user SaaS product, GFI Cloud.

        Flexible Deployment and Licensing Alternatives.    Depending on the solution and market, we support different deployment, usage and licensing arrangements, which we believe increases our potential market opportunity. Meeting the varied deployment and usage needs of our customers has enabled us to build a large and diverse global customer base.

Our Business Model

        Our differentiated business model is designed to accelerate the adoption of our solutions by reducing the time and cost of implementation for our customers. At the same time, our sales strategy enables large sales volumes and efficient distribution. Our business model is characterized by the following attributes:

        High-Velocity Global Distribution.    Our scalable marketing model targets end-users and channel partners to create awareness of our brand and solutions. We offer all of our products via download directly from our website to maximize our distribution reach and to reduce sales and marketing expense. We support our Internet-based distribution with an inside sales force and an indirect partner network of over 25,000 channel partners acting as resellers worldwide. Our model has resulted in a high volume of transactions with SMB customers and a high proportion of sales that do not require any involvement from our sales staff.

        Downloadable, Full-Featured, Free Solutions Offered for a Designated Trial Period.    To facilitate the adoption of our solutions, we seek to reduce the time and expense required to purchase, implement and test our products. We offer downloadable, full-featured, free versions of most of our products for a designated trial period. This try-before-you-buy approach reduces purchase risk for our prospective customers, thereby enabling them to understand the benefits of our solutions prior to purchase. In addition, our TeamViewer product uses a freemium model that has driven high levels of product adoption.

        Simple Product Adoption.    Our solutions are designed to address the specific needs of our customers, providing a clear value proposition to reduce our customers' total cost of ownership. In addition, our solutions are easy to install and do not require professional services, features which allow our customers to quickly address their particular IT challenges.

        Data-Driven Management.    We have developed systems and processes that enable us to closely monitor and manage the results of our business. We also use search engine optimization and Internet marketing to attract potential customers. We continually monitor and analyze customer traffic and purchasing patterns to improve service levels, enhance our marketing strategy and drive better business decisions. We believe we have acquired a significant competitive advantage through our use of data analytics, lead nurturing and data synthesis.

        Substantial Viral Network Effects.    TeamViewer benefits from significant viral network effects. As the number of users of TeamViewer has expanded and consumer awareness of the product has grown, adoption has continued to increase. Growth in the number of TeamViewer users increases the value of the

 

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network, contributing to the viral adoption of the product and requiring minimal investment in sales and marketing.

        Leveraged Technology Development.    Wherever possible, we share technologies and best practices throughout our global research and development organization, decreasing our costs of development. By building upon technologies and best-practices across our organization, we optimize quality, take advantage of economies of scale and improve efficiency across our development groups.

Our Growth Strategy

        Our objective is to extend our position as a leading provider of software solutions to SMBs. To accomplish this, we intend to:

        Expand our Customer Base.    We intend to continue the rapid expansion of our customer base through our specialized global distribution model. Our current customer base of over 244,000 business customers represents less than 0.5% of global SMBs. We will aggressively promote our solutions and encourage new businesses and consumers to try our solutions. We have been successful in utilizing the Internet as a powerful marketing channel to reach prospective customers and in converting trial users to paying customers at the end of the trial period.

        Expand our Distribution Channels.    We intend to increase the sales of our solutions through our 25,000 existing channel partners and to continue to add channel partners. We seek to significantly expand our indirect channel across the globe to maximize our distribution capabilities. In addition, we will continue to focus on licensing our technology to our original equipment manufacturer, or "OEM," partners who enhance their products by embedding our technology.

        Accelerate our Revenue Growth in Targeted Geographies.    Our sales and distribution model allows us to address the needs of SMBs across all geographies and industries. We believe that we have a substantial opportunity to accelerate our revenue growth in largely untapped emerging markets such as Asia-Pacific, Latin America and Eastern Europe by increasing our sales, marketing and support operations in these regions. Additionally, we see further growth opportunities in the United States, as our U.S. subsidiaries generated less than half of our global revenue in 2011.

        Develop and Extend New Software and SaaS Products.    We plan to increase our investment in product development in order to develop new, complementary solutions while continuing to enhance the functionality of our current solutions. Recent development initiatives include the addition of a scalable web presentation/meeting mode to TeamViewer, a significant upgrade to our VIPRE line of products and the introduction of our VIPRE Mobile Security for Android offering in response to the growing demand for security solutions for mobile devices. In 2012, we expect to launch new SaaS products.

        Leverage GFI MAX Platform to Expand our Reach.    GFI MAX is our cloud-based platform that enables MSPs to deliver remote IT management, monitoring and security to their SMB customers on an outsourced basis. The GFI MAX platform enables us to easily integrate and deliver additional products as a single, cohesive solution at an attractive, small incremental fee to new and existing devices under management. For example, over 50% of our existing GFI MAX customers have adopted remote control functionality since we made it available and, similarly, since we added patch management, approximately 40% have adopted this feature. In 2012, we intend to launch a new product directly to SMBs, GFI Cloud, that will utilize the approach and architecture that underlie the GFI MAX platform.

        Increase Sales to Existing Customers.    We enjoy a high level of customer satisfaction, which we believe provides us with the opportunity to sell additional solutions to our 244,000 existing business customers. As of December 31, 2011, only 23% of our customers have purchased two of our products, and less than 5% have purchased three or more of our products. We intend to expand our revenue from our existing customers by cross-selling other solutions and selling additional licenses and upgrades.

 

6


 

        Pursue Strategic Acquisitions.    We have a successful track record of making strategic acquisitions that complement our existing solutions and business model and extend our position among SMBs. We intend to pursue strategic acquisitions that will enable us to accelerate the introduction of new IT solutions for SMBs.

Risks Related to Our Business

        Our business is subject to a number of risks that you should understand before making an investment decision. These risks are discussed more fully under the section entitled "Risk Factors" beginning on page 14 of this prospectus. These risks include the following:

    the markets in which we compete are highly competitive, and we could be unable to compete effectively;

    if the market for collaboration, IT infrastructure and MSP software solutions does not grow, our business and operating results will be harmed;

    if we are unable to generate significant volumes of sales leads, in particular from Internet search engines and marketing campaigns, traffic to our website could decrease and, as a result, our revenue could decrease;

    we rely on third-party channel partners acting as resellers to generate a material portion of our revenue and if our partners fail to perform, our ability to sell our solutions will be negatively impacted and our operating results will be harmed;

    our independent auditors have communicated several material weaknesses in our internal control over financial reporting, and these material weaknesses could impair our ability to comply with the accounting and reporting requirements applicable to public companies;

    our quarterly operating results could fluctuate significantly, which makes our future results difficult to predict and makes period-to-period comparisons potentially not meaningful;

    we have a limited operating history as a combined entity, have experienced rapid growth in recent periods, and may be unable to manage our growth effectively;

    we may not be able to reliably predict our Billings, revenue, earnings or cash flow, even in the near term;

    the success of our business depends on our ability to protect and enforce our intellectual property rights;

    our products, including products obtained through acquisitions, could infringe third-party intellectual property rights, which could result in material litigation costs;

    if we fail to develop our brands cost-effectively, or if we fail to maintain the integrity and reputation of our brands, our financial condition and operating results might suffer; and

    if we are unsuccessful in developing and selling new products and product enhancements, our business and operating results will be harmed.

        In addition, we are subject to risks related to our international operations, our corporate structure and our status as a foreign private issuer. In connection with your investment decision, you should review the section of this prospectus entitled "Risk Factors."

Corporate Reorganization

        Prior to this offering, we have conducted our business through GFI Software S.à r.l., a Luxembourg limited liability company (société à responsabilité limitée) and its direct and indirect subsidiaries. The

 

7


 

registrant does not engage in any operations and has only nominal assets, other than a 100% interest in TV GFI Holding Company S.à r.l., a Luxembourg limited liability company (société à responsabilité limitée), which itself does not engage in any operations or own any material assets, other than a 100% direct or indirect interest in our operating subsidiaries. In connection with this offering, we intend to undergo a corporate reorganization that is expected to occur prior to the effectiveness of the registration statement of which this prospectus forms a part and which will involve, among other things, the conversion of the registrant into a Luxembourg joint stock company (société anonyme), becoming GFI Software S.A. Investors in this offering will only receive, and this prospectus only describes the offering of, common shares of GFI Software S.A.

Our Corporate Information

        The registrant was incorporated under the name Crystal Indigo S.à r.l. as a limited liability company (société à responsabilité limitée) under the laws of the Grand Duchy of Luxembourg in June 2009 and thereafter changed its name to TV Holding S.à r.l. in July 2009. On July 27, 2011, TV Holding S.à r.l. changed its name to GFI Software S.à r.l. The registrant will be converted, in connection with this offering, into a Luxembourg joint stock company (société anonyme), becoming GFI Software S.A. as part of the corporate reorganization described in further detail under the section entitled "Corporate Reorganization" included elsewhere in this prospectus. Our principal executive offices are located at 7A, rue Robert Stümper, L-2557 Luxembourg, Grand Duchy of Luxembourg. Our telephone number is +352 2786-0231. The address of our website is http://www.gfi.com. Information on, or accessible through, our website is not a part of, and is not incorporated into, this prospectus.

        All of the activities of the registrant are conducted through various subsidiaries, which are organized and operated according to the laws of their country of incorporation.

        "GFI Software," "GFI," "TeamViewer," "VIPRE," "GFI MAX," "GFI WebMonitor," "GFI MailSecurity," "GFI EventsManager," "FaxMaker," "LanGuard," "GFI MailEssentials," and "VIPRE Mobile" among others, are our trademarks in various jurisdictions. This prospectus may also refer to brand names, trademarks, service marks and trade names of other companies and organizations, and those brand names, trademarks, service marks and trade names are the property of their respective owners.

 

8


THE OFFERING

Common shares offered by us

      shares

Common shares offered by the selling shareholders

                 shares
         

Total common shares offered

      shares
         

Over-allotment option

 

The selling shareholders have granted the underwriters an option to purchase up to            additional common shares to cover over-allotments.

Common shares to be outstanding immediately after this offering

                   shares

Use of proceeds

  We presently intend to use approximately $            of the net proceeds of this offering to repay debt and related interest and the remainder for working capital and general corporate purposes.

  A $1.00 increase (decrease) in the assumed initial offering price of $                per share would increase (decrease) the net proceeds of this offering to be received by us by $                million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. For each $1.00 increase (decrease), we would anticipate increasing (decreasing) our investment in our business accordingly.

  We will not receive any proceeds from the sale of common shares by the selling shareholders. See "Principal and Selling Shareholders."

  See "Use of Proceeds."

Dividend Policy

  We do not expect to pay any cash dividends in the foreseeable future. See "Dividend Policy."

Risk Factors

  You should carefully read the "Risk Factors" section of this prospectus for a discussion of factors that you should consider before deciding to invest in our common shares.

Proposed            Symbol

  "                        "

        The number of our common shares to be outstanding after this offering is based on 110,578,806 common shares outstanding as of December 31, 2011 and excludes:

    10,794,579 common shares issuable upon exercise of options outstanding as of December 31, 2011, at a weighted average exercise price of $4.71 per share, of which 2,094,202 options are currently exercisable;

    705,421 common shares authorized for future grants under our incentive plans as of December 31, 2011;

        Except as otherwise noted, all information in this prospectus:

    assumes an initial public offering price of $                per share, the midpoint of the estimated price range set forth on the cover page of this prospectus; and

    assumes no exercise of the underwriters' over-allotment option.

 

9


SUMMARY CONSOLIDATED FINANCIAL AND OTHER DATA

        The following tables summarize our consolidated financial and other data. You should read the following summary financial and other data together with our consolidated financial statements and related notes as well as "Operating and Financial Review and Prospects" and the other financial information included elsewhere in this prospectus.

        The summary consolidated statement of operations data and the consolidated statement of comprehensive income data for years ended December 31, 2009, 2010 and 2011 and the consolidated balance sheet data as of December 31, 2010 and 2011 have been derived from our audited consolidated financial statements appearing elsewhere in this prospectus. The consolidated balance sheet data as of December 31, 2009 has been derived from our audited consolidated financial statements not included in this prospectus. For periods prior to July 29, 2009, the date on which the registrant and GFI Acquisition came under common control, our audited consolidated financial statements present the consolidated results and changes in equity solely of GFI Acquisition and its subsidiaries. See "Special Note Regarding Our Corporate History and the Presentation of Our Financial Information."

        Our financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the International Accounting Standards Board. Historical results are not indicative of the results to be expected in the future.

 
  Year ended December 31,  
 
  2009   2010   2011  
 
  (in thousands, except share and per share data)
 

Consolidated Statement of Operations Data:

                   

Revenue

  $ 50,136   $ 81,725   $ 120,077  

Cost of sales(1)

    8,955     19,059     23,919  
               

Gross profit

    41,181     62,666     96,158  
               

Operating costs:

                   

Research and development(1)

    6,495     14,114     24,885  

Sales and marketing(1)

    16,369     31,132     52,916  

General and administrative(1)

    7,474     16,755     37,757  

Depreciation, amortization and impairment

    10,317     18,629     22,475  
               

Total operating costs

    40,655     80,630     138,033  
               

Operating (loss) / profit

    526     (17,964 )   (41,875 )

Finance costs, net

    (13,618 )   (16,480 )   (10,119 )

Other income / (costs), net

    446     (1,328 )   (3,267 )
               

Loss before taxation

    (12,646 )   (35,772 )   (55,261 )

Tax benefit

    3,320     7,493     3,325  
               

Loss for the year

  $ (9,326 ) $ (28,279 ) $ (51,936 )
               

Total loss attributable to owners of GFI Software S.à r.l. 

  $ (5,562 ) $ (21,878 ) $ (51,936 )
               

Comprehensive loss

  $ (9,499 ) $ (32,385 ) $ (41,882 )
               

Comprehensive loss attributable to owners of GFI Software S.à r.l.

  $ (6,005 ) $ (25,984 ) $ (41,882 )
               

Basic and diluted loss per:

                   

Class A common share

  $ (0.31 ) $ (0.56 ) $ (12.08 )

Class B preferred participating share(2)

  $ (0.31 ) $ (0.42 ) $ (0.48 )

Weighted average shares outstanding

                   

Class A common shares

    17,958,490     29,872,486     44,201,227  

Class B preferred participating shares(2)

    77,875     12,658,701     66,377,579  

 

10


 

 
  Year ended December 31,  
 
  2009   2010   2011  
 
  (in thousands, except share and per share data)
 

Supplemental Financial Metrics:

                   

Billings(3)

  $ 71,470   $ 143,526   $ 200,240  

Unlevered Free Cash Flow (unaudited)(3)

    17,201     52,887     54,613  

Adjusted EBITDA(3)

    33,902     66,448     74,895  

(1)
Includes share-based compensation expense, as follows:

 

Cost of sales

  $ 25   $ 34   $ 321  
 

Research and development

    55     63     1,153  
 

Sales and marketing

    148     453     2,076  
 

General and administrative

    281     442     6,688  
(2)
See "Description of Share Capital—Historical Development of the Share Capital of the Registrant" for a description of the issuance (including the terms thereof) and subsequent elimination of the class B preferred participating shares.

(3)
See "Supplemental Information" below for how we define and calculate Billings, Unlevered Free Cash Flow and Adjusted EBITDA, and for a reconciliation of these non-IFRS measures to the most directly comparable IFRS measures, and a discussion about the limitations of these non-IFRS financial measures.

        The following table presents our summary consolidated balance sheet data for each of the periods indicated:

 
  As of December 31,   As adjusted(1)  
 
  2009   2010   2011   2011  
 
   
   
   
  (unaudited)
 
 
  (in thousands, except share data)
 

Consolidated Balance Sheet Data:

                         

Cash at bank and in hand

  $ 9,067   $ 22,719   $ 16,524        

Total assets

  $ 315,499   $ 367,995   $ 369,408        

Working capital(2)

  $ (48,906 ) $ (103,813 ) $ (92,941 )      

Deferred revenue, including long-term portion

  $ 43,418   $ 117,738   $ 190,154        

Interest-bearing loans and borrowings

  $ 201,151   $ 87,312   $ 213,969        

Total liabilities

  $ 279,046   $ 239,494   $ 446,487        

Issued capital

  $ 40,319   $ 154,932   $ 1,549        

Total equity

  $ 36,453   $ 128,501   $ (77,079 )      

Shares outstanding

                         

Class A common shares

    2,859,790,850     3,317,364,167     110,578,806        

Class B preferred participating shares(3)

    17,828,100     7,740,516,390            

(1)
As adjusted information included above in the consolidated balance sheet data gives effect to the sale of                        common shares by us in this offering at an assumed initial public offering price of $                per share (the midpoint of the estimated price range set forth on the cover page of this prospectus), after deducting the underwriting discount and estimated offering expenses payable by us.

(2)
Includes current portion of deferred revenue of $25,629, $51,281 and $78,777 as of December 31, 2009, 2010 and 2011, respectively.

(3)
See "Description of Share Capital—Historical Development of the Share Capital of the Registrant" for a description of the issuance (including the terms thereof) and subsequent elimination of the class B preferred participating shares.

 

11


Supplemental Information

    Billings

        Billings is a non-IFRS financial measure which we calculate by adding revenue recognized during the applicable period to the change in deferred revenue between the start and end of the same period, as presented in our consolidated statement of cash flows. We consider Billings to be a leading indicator of future revenue and operational growth based on our business model of billing total arrangement fees at the time of sale, and we use Billings to evaluate the operating performance of our operating segments. Our use of Billings as a non-IFRS measure has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for revenue or an analysis of our results as reported under IFRS. Some of these limitations are:

    Billings does not predict revenue for a specific future period. Trends in Billings are not directly correlated to trends in revenue except when measured over longer periods; and

    Other companies, including companies in our industry, may not use Billings, may calculate Billings differently, or may use other financial measures to evaluate their performance—all of which reduce the usefulness of Billings as a comparative measure.

        A significant portion of our Billings relates to solutions for which the corresponding revenue is deferred and subsequently recognized over time. In particular, Billings for maintenance, subscriptions and web-based services are typically invoiced in advance of ratable revenue recognition, which typically ranges over periods of up to 48 months.

        The following table reconciles revenue, the most directly comparable IFRS measure, to Billings for each of the periods indicated:

 
  As of December 31,  
 
  2009   2010   2011  
 
  (in thousands)
 

Reconciliation of revenue to Billings:

                   

Revenue

  $ 50,136   $ 81,725   $ 120,077  

Change in deferred revenue

    21,334     61,801     80,163  
               

Billings

  $ 71,470   $ 143,526   $ 200,240  
               

    Unlevered Free Cash Flow

        Unlevered Free Cash Flow is a non-IFRS financial measure that we define as net cash flows from operating activities less capital expenditures, net of proceeds from the sales of property and equipment. Our management uses this measure when evaluating the operating performance of our consolidated business. We believe Unlevered Free Cash Flow provides management and investors with a more complete understanding of the underlying liquidity of our core operating business and our ability to meet our current and future financing and investing needs. While we believe that this non-IFRS financial measure is useful in evaluating our business, this information should be considered as supplemental in nature and is not meant as a substitute for net cash flows from operating activities presented in accordance with IFRS.

 

12


 

        The following table presents a reconciliation of net cash flows from operating activities, the most comparable IFRS financial measure, to Unlevered Free Cash Flow for each of the periods indicated:

 
  For the Year Ended December 31,  
 
  2009   2010   2011  
 
  (in thousands)
 

Reconciliation of net cash flows from operating activities to Unlevered Free Cash Flow:

                   

Net cash flows from operating activities

  $ 18,069   $ 55,007   $ 59,939  

Capital expenditures, net of proceeds from sales of property and equipment

    (868 )   (2,120 )   (5,326 )
               

Unlevered Free Cash Flow

  $ 17,201   $ 52,887   $ 54,613  
               

    Adjusted EBITDA

        Adjusted EBITDA is a non-IFRS financial measure that we calculate as profit (loss) for the year, adjusted for tax benefit (expense), unrealized exchange fluctuations, finance costs, finance revenue, gain (loss) on disposals, depreciation, amortization and impairment, share-based compensation, specific extraordinary, non-recurring items, plus the change in deferred revenue between the start and end of the period, as presented in our consolidated statement of cash flows. We believe that Adjusted EBITDA provides useful information to investors and analysts in understanding and evaluating our operating results in the same manner as our management and Board, and we use Adjusted EBITDA to evaluate the operating performance of our operating segments. In addition, our lenders under our senior secured credit facility utilize consolidated EBITDA (as defined in our senior secured credit facility), which we believe to be the same as Adjusted EBITDA, as a key measure of our financial performance in relation to certain of our operating covenants under our senior secured credit facility. See "Operating and Financial Review and Prospects—Liquidity and Capital Resources—Indebtedness—2011 Senior Secured Credit Facility" for a further discussion of the use of consolidated EBITDA in our senior secured credit facility. Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under IFRS.

        The following table presents a reconciliation of loss (profit), the most comparable IFRS financial measure, to Adjusted EBITDA for each of the periods indicated:

 
  For the Year Ended December 31,  
 
  2009   2010   2011  
 
  (in thousands)
 

Reconciliation of loss to Adjusted EBITDA

                   

(Loss) / profit for the year

  $ (9,326 ) $ (28,279 ) $ (51,936 )
               

Tax (benefit) / expense

    (3,320 )   (7,493 )   (3,325 )

Finance costs

    13,659     16,576     10,203  

Finance revenue

    (41 )   (96 )   (84 )

Depreciation, amortization and impairment

    11,533     21,619     26,369  
               

EBITDA

    12,505     2,327     (18,773 )
               

Reconciling items:

                   

Change in deferred revenue

    21,334     61,801     80,163  

Share-based compensation

    509     992     10,238  

Unrealized exchange fluctuations

    (446 )   2,993     3,362  

(Gain) / loss on disposals

        (1,665 )   (95 )
               

Adjusted EBITDA

  $ 33,902   $ 66,448   $ 74,895  
               

 

13


RISK FACTORS

        An investment in our common shares involves a high degree of risk. You should consider carefully the risks described below, together with the other information contained in this prospectus, including in our financial statements and the related notes included in this prospectus, before you decide whether to buy our common shares. If any of the following risks actually occur, our business, results of operations and financial condition could suffer significantly. In any of these cases, the market price of our common shares could decline, and you may lose all or part of the money you paid to buy our common shares.

Risks Related to Our Business and Industry

We operate in highly competitive markets, which could make it difficult for us to acquire new customers and retain existing customers.

        The markets for our solutions are intensely competitive, are subject to rapid change and have relatively low barriers to entry. Competition in our markets is based primarily on: the ability to design, develop and deliver purpose-built software solutions with the specific features and functionality to meet the needs of SMBs; ease of initial setup, deployment and ongoing use; total cost of ownership, including product price and implementation and support costs; ability to deliver rapid time-to-value to customers; distribution channels; high-quality customer service and support; product and brand awareness; and pricing flexibility. We face competition from both traditional, larger software vendors offering enterprise-wide software frameworks and services and smaller software companies offering products and services for specific IT issues. Our principal competitors vary depending on the product we offer and the geographical region in which we are competing. Our competitors and the products against which our products compete include Citrix Systems' online services, including GoToMyPC and GoToMeeting, LogMeIn, WebEx (acquired by Cisco Systems), McAfee (acquired by Intel), Symantec's Norton security solutions, Microsoft and various other vendors. Competition could result in increased pricing pressure, reduced operating margins, increased sales and marketing expenses and failure to increase, or the loss of, market share, any of which would likely seriously harm our business, operating results and financial condition.

Expansion into our target markets by certain of our competitors could adversely affect our revenue growth.

        Our larger competitors in our target markets typically enjoy greater name recognition and substantially greater financial, technical and other resources than we do. In addition, some of our competitors have established marketing relationships, major distribution agreements with consultants, system integrators, manufacturers and resellers and access to larger customer bases, and have made acquisitions or formed strategic partnerships and alliances to create more comprehensive product offerings. If one of our larger competitors expands into the collaboration market, that competitor may leverage its substantial competitive advantages and our revenue and operating results could be harmed.

Unless we develop better market awareness of our company and our solutions, our revenue may not continue to grow.

        We are a relatively new entrant in the collaboration, IT infrastructure and MSP software solutions markets, and we believe we have not yet established broad market awareness of our participation in these markets. Market awareness of our capabilities and solutions is essential to our continued growth and our success in all of our markets. If our marketing programs are not successful in creating market awareness of our company and solutions, our business, financial condition and results of operations will be adversely affected, and we will not be able to achieve sustained growth.

14


If we are unable to generate significant volumes of sales leads from Internet search engines and marketing campaigns, traffic to our website and our revenue may decrease.

        We generate a substantial majority of our sales leads through visits to our websites by potential customers interested in purchasing or downloading evaluations of our products. Many of these potential customers find our websites by searching for IT management, security or remote connectivity and collaboration software products through Internet search engines, such as Google and Yahoo! A critical factor in attracting potential customers to our websites is how prominently our websites are displayed in response to search inquiries. If we are listed less prominently or fail to appear in search result listings for any reason, visits to our websites by customers and potential customers could decline significantly. We may not be able to replace this traffic and, if we attempt to replace this traffic, we may be required to increase our sales and marketing expenses, which may not be offset by additional revenue and could adversely affect our operating results.

Failure to effectively and efficiently service SMBs would adversely affect our ability to increase our revenue.

        We develop the majority of our collaboration, IT infrastructure and MSP software solutions specifically for SMBs, and our success depends on our ability to attract and retain SMB customers. SMBs are challenging to reach, acquire and retain in a cost-effective manner. To grow our revenue, we must add new customers, sell additional products or product enhancements to existing customers and encourage existing customers to renew their subscription or maintenance agreements. Selling to and retaining SMBs is more difficult than selling to and retaining large enterprise customers because SMB customers generally have high failure rates, are price sensitive, are difficult to reach with targeted sales campaigns, have high churn rates and generate less revenue per customer and per transaction. In addition, SMBs frequently have limited budgets and may choose to spend funds on items other than our products. If these organizations experience economic hardship, they may be unwilling or unable to expend resources on technology software and services. If we are unable to market and sell our solutions to SMBs with competitive pricing and in a cost-effective manner, our ability to grow our revenue will be harmed.

If we are unable to enhance existing products, or to develop or acquire new products that respond to rapidly changing customer requirements, technological developments or evolving industry standards, our existing products may be rendered obsolete and our long-term revenue growth will be harmed.

        The markets for our products are characterized by rapid technological advances, changes in customer requirements, changes in protocols and evolving industry standards. Our long-term growth depends on our ability to enhance and improve our existing products and to introduce or acquire new products that respond to these demands promptly. If we are unable to add products and develop enhancements to our existing products that are satisfactory to our customers, if our customers purchase or develop their own competing products and technologies or if technical developments render our products or certain features of our products obsolete, demand for our solutions will decrease, and our operating results will be harmed.

If we are unable to attract new customers or to sell additional products to our existing customers, our revenue growth will be adversely affected.

        To maintain and also to increase our revenue, we must regularly add new customers or sell additional products to existing customers. We expect to incur significant additional expenses in expanding our sales and development personnel and our worldwide operations in order to achieve revenue growth. We may be unable to maintain or increase traffic to our websites and our marketing efforts may be unsuccessful in generating evaluation downloads, resulting in fewer sales leads. We may fail to identify growth opportunities for our current products, and we may misinterpret the market for new products and technologies. If we fail to attract new customers or our new product introductions or acquisitions are not successful, we may be unable to maintain or increase our revenue and our operating results may be adversely affected.

15


Our business depends on customers renewing their annual maintenance contracts and purchasing upgrades. Any decline in maintenance renewals or upgrade purchases could harm our future operating results.

        We sell our products to our customers either pursuant to a license arrangement that may or may not include optionally renewable one, two or three years of maintenance as part of the initial price, pursuant to a perpetual license without maintenance, or on a monthly subscription basis. Our customers have no obligation to renew their maintenance agreements after the expiration of the initial period, and they may decide not to renew maintenance agreements. Furthermore, our customers have no obligation to purchase upgrades and can cancel monthly subscriptions without significant notice or penalty. Our customers' renewal rates may decline or fluctuate as a result of a number of factors, including their level of satisfaction with our products, the prices of our products, the prices of products and services offered by our competitors or reductions in our customers' spending levels. As such, we are unable to predict future customer renewal rates accurately. In addition, a substantial portion of our quarterly maintenance revenue is attributable to maintenance agreements entered into during previous quarters. As a result, if there is a decline in renewed maintenance agreements in any one quarter, only a small portion of the decline will be reflected in our maintenance revenue recognized in that quarter and the rest will be reflected in our maintenance revenue recognized in the following four quarters or more. If our customers do not renew their maintenance arrangements or if they renew them on less favorable terms, do not purchase upgrades or do not renew subscription agreements, our revenue may decline and our business will suffer.

If we fail to convert our free users to paying customers, our revenue and financial results will be harmed.

        A significant portion of our user base utilizes our products free of charge through free trials of our products. We seek to convert these trial users to paying customers. If our rate of conversion or the growth or size of our free user base suffers for any reason, our revenue may fail to grow and our business may suffer. In addition, we offer our TeamViewer product free of charge for non-commercial use. We maintain controls to ensure these products are being used solely for non-commercial use; however, we cannot guarantee that all non-paying end-users of our TeamViewer product are using the product solely for non-commercial purposes. If we cannot effectively monitor the nature of use of our TeamViewer product by our end-users, our revenue may decline and our business would suffer.

We have a limited operating history as a combined entity and have experienced rapid growth in recent periods. If we are unable to manage our growth effectively, our revenue and operating results could be adversely affected.

        Our combined company has been in existence since November 2010, and much of our growth has occurred in recent periods. In 2011, we increased our headcount significantly, including key hires in our legal, finance and accounting departments, and we also acquired new technology and know-how through an acquisition in Armenia. During 2009 and 2010, we made substantial investments in our information systems and significantly expanded our operations in Europe and in the United States. We also acquired new technology and development personnel in Germany, the United Kingdom, Romania and California in 2009, and we anticipate that further significant expansion will be required. Sustaining our growth will place significant demands on our management as well as on our administrative, operational and financial resources. We have encountered and will continue to encounter risks and difficulties frequently experienced by growing companies in rapidly changing industries. Risks that we face include:

    training new personnel to become productive and generate revenue;

    controlling expenses and investments in anticipation of expanded operations;

    implementing and enhancing our administrative infrastructure, systems and processes;

    addressing new product markets; and

    expanding operations in the countries in which we operate and new geographic regions.

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        To manage our growth, we must continue to improve our operational, financial and management information systems and expand, motivate and manage our workforce. If we are unable to manage our growth successfully without compromising the quality of our solutions and our profit margins, or if new systems that we implement to assist in managing our growth do not produce the expected benefits, our revenue and operating results could be harmed.

If we fail to develop our brands cost-effectively, or if we fail to maintain the integrity and reputation of our brands, our financial condition and operating results might suffer.

        We believe that developing and maintaining the awareness and integrity of our brands in a cost-effective manner is important to achieving widespread acceptance of our existing and future solutions and are important elements in attracting new customers. We believe that the importance of brand recognition will increase as competition in our markets further intensifies. Successful promotion of our brands will depend on the effectiveness of our marketing efforts and on our ability to provide reliable and useful solutions at competitive prices. We intend to increase our expenditures on brand promotion. Brand promotion activities may not yield increased revenue, and even if they do, the increased revenue may not offset the expenses we incur in building our brands. Furthermore, we rely on certain third-party channel partners in the distribution of our products. We have limited or no control over these third parties and actions by these third parties could negatively impact our brand. Our products are also reviewed by industry analysts, bloggers and other commentators who publish reviews of our solutions. Negative feedback regarding our company or our solutions could have a negative effect on our brand. If we fail to promote and maintain our brands successfully or to maintain loyalty among our customers and our end-user community, or if we incur substantial expenses in unsuccessful attempts to promote and maintain our brands, we may fail to attract new customers or retain our existing customers and our financial condition and results of operations could be harmed.

Failure to comply with data protection laws and standards that vary and are contradictory across the multiple jurisdictions in which we operate may expose us to liability and a loss of customers.

        Businesses that collect and maintain personal information are subject to many national, state and international laws and regulations regarding the collection, storage, use, protection and processing of such data. These laws and regulations, as well as their interpretation, in particular in the European Union and the United States, are evolving and changing, and may be contradictory in their requirements. Compliance with these numerous and contradictory requirements is particularly difficult for an online business such as ours that collects personal information from customers in multiple jurisdictions. Failure to comply with these laws could result in legal liability and/or government sanctions, as well as reputational harm, and we may not be successful in avoiding potential liability or disruption of business resulting from the failure to comply with these laws. If we are required to pay any significant amount of money in satisfaction of claims under these laws, or if we are forced to cease our business operations for any length of time as a result of our inability to comply fully with any of these laws, our business, operating results and financial condition could be adversely affected.

If our products are used to commit fraud or other similar intentional or illegal acts, we may incur significant liabilities, our products may be perceived as not secure and customers may curtail or stop using our solutions.

        Our TeamViewer product enables direct remote access to computer systems. We do not control the use or content of information accessed by our customers through our products, including our TeamViewer product. If our products are used to commit fraud or other nefarious or illegal acts, such as posting, distributing or transmitting any software or other computer files that contain a virus or other harmful component, interfering or disrupting third-party networks, infringing any third party's copyright, patent, trademark, trade secret or other proprietary rights or rights of publicity or privacy, transmitting any unlawful, harassing, libelous, abusive, threatening, vulgar or otherwise objectionable material, or accessing

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unauthorized third-party data, we may become subject to claims for defamation, negligence, intellectual property infringement or other matters. Defending any such claims could be expensive and time-consuming, and we could incur significant liability to our customers and to individuals or businesses that were the targets of such acts. As a result, our business may suffer and our reputation may be damaged.

Evolving regulation of the Internet may adversely affect our data-driven marketing process.

        In monitoring our business results, we track, through the remote telemetry built into many of our products, how many customers have installed our products and how many customers are using those products. We also use tracking technologies, including cookies and related technologies, to help us track the activities of the visitors to our websites and to communicate with existing and potential customers. In addition, as part of our product download process and during our sales process, given the choice, most of our customers agree to receive emails and other communications from us. Several jurisdictions have proposed or adopted laws or regulations governing the collection, processing, use, retention, sharing and security of consumers' personal data, including laws that restrict or prohibit the sending of unsolicited bulk electronic messages, or so-called spam, and also including new regulations on the use of cookies. In addition, privacy groups and government bodies have increasingly scrutinized the ways in which companies collect data associated with particular users or devices, and we expect such scrutiny to continue to increase. As a result of such regulation and scrutiny, we may be required to modify or discontinue our existing practices, possibly requiring significant expenditures and negatively affecting our ability to effectively monitor our business results and market our solutions. Furthermore, any claims or allegations that we have violated laws and regulations relating to privacy could result in negative publicity, and investigating or responding to any such claims or allegations could present a significant cost to us, which in each case would have an adverse effect on our business, operating results and financial condition.

If we or our third-party providers fail to protect confidential information against security breaches, or if our customers or potential customers are reluctant to use our websites because of privacy concerns, we might face additional costs and activity in our websites could decline.

        During the purchasing process and in connection with evaluations of certain of our software products, either we or third-party providers collect and use personally identifiable information such as credit card numbers, email addresses and phone numbers. This information could be compromised or accessed as a result of misappropriation or security breaches, and we could be subject to liability as a result. For example, our customers may be subject to phishing attempts, or instances in which third parties posing as representatives of our company unlawfully solicit our customers' private data. In addition, our servers and those of our third-party service providers are vulnerable to computer viruses or physical or electronic break-ins. Under the data protection laws in certain jurisdictions in which we operate, we are required by law to affirmatively disclose to the appropriate regulatory agency or the relevant customer those instances where personal data may have been wrongfully disclosed, lost, stolen or otherwise misappropriated. Failure to comply with such laws may increase the risk of government action and legal claims against us, and cause harm to our reputation.

Our business is dependent on market demand for, and acceptance of, the SaaS model for the use of software.

        We derive, and expect to continue to derive, revenue from the sale of SaaS solutions, a relatively new and rapidly changing market in which software is provided as a third-party service rather than a physical product delivery. As a result, widespread acceptance and use of the SaaS business model is important to our future growth and success. Under the perpetual or periodic license model for software procurement, users of the software typically run applications on their hardware. Because companies are generally predisposed to maintaining control of their IT systems and infrastructure, or may have data privacy concerns, there may be resistance to the concept of accessing the functionality that software provides as a

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service through a third party. If the market for SaaS solutions fails to grow or grows more slowly than we currently anticipate, demand for our services could be negatively affected.

Growth of our business may be adversely affected if businesses, IT support providers or consumers do not adopt remote connectivity and remote support solutions more widely.

        Our TeamViewer product employs new and emerging technologies for remote access and remote support. Our target customers may hesitate to accept the risks inherent in applying and relying on new technologies or methodologies to supplant traditional methods of remote connectivity. Our business will not be successful if our target customers do not accept the use of our remote access and remote support technologies.

Expansion of our business into new geographic markets will subject us to additional economic and operational risks that could increase our costs and make it difficult for us to operate profitably.

        The continued international expansion of our operations may require significant expenditure of financial and management resources and result in increased administrative and compliance costs. In addition, such expansion will increasingly subject us to the risks inherent in conducting business internationally, including:

    currency fluctuations, which could result in reduced revenue and increased operating expenses;

    localization of our services, including translation into different languages and adaptation for local practices and regulatory requirements;

    the effect of applicable local tax structures, including tax rates that may be higher than our current tax rates or taxes that may be duplicative of those currently imposed on us;

    tariffs and trade barriers;

    difficulties in managing and staffing larger international operations;

    general economic and political conditions in each country;

    inadequate intellectual property protection in certain countries;

    dependence on certain third parties, including channel partners with whom we may not have extensive experience;

    the difficulties and increased expenses in complying with a variety of different laws, regulations and trade standards, including data protection and privacy laws;

    international regulatory environments; and

    longer accounts receivable payment cycles and increased difficulty in collecting accounts receivable.

        If we are unable to effectively manage our expansion into additional geographic markets, our financial condition and results of operations could be harmed.

We rely on third-party channel partners to generate a material portion of our revenue; if our partners fail to perform, our ability to sell our solutions will be negatively impacted and, if we fail to optimize our channel partner model going forward, our operating results will be harmed.

        A material portion of our revenue is generated through sales to our channel partners, which include distributors, resellers and OEM partners. We depend upon these channel partners to generate sales opportunities and manage the sales process. Our channel partners may be unsuccessful in marketing, selling and supporting our products. In addition, our channel partners generally do not have minimum purchase requirements. They may also market, sell and support products that are competitive with ours,

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and may devote more resources to the marketing, sales and support of such products. Our channel partners may have incentives to promote our competitors' products to the detriment of our own, and may cease selling our products altogether. We cannot assure you that we will retain channel partners or that we will be able to secure additional or replacement channel partners. The loss of one or more of our significant channel partners or the failure to obtain and deliver a large number of orders each quarter to or through them could harm our operating results. Our third-party partner sales structure could subject us to lawsuits, potential liability and reputational harm if, for example, any of our partners misrepresents the functionality of our products to end-users or our partners violate laws or our corporate policies. In addition, we may not be able to monitor our third-party partners for regulatory compliance. If our partners fail to comply with applicable regulations in the jurisdictions in which they operate, it could adversely affect our reputation and subject us to litigation and sanctions. If we fail to effectively manage our sales channels, our business will be seriously harmed.

Failure to expand our sales operations effectively could harm our ability to increase our customer base and to achieve broader market acceptance of our solutions.

        Increasing our customer base and achieving broader market acceptance of our solutions will depend on our ability to expand our sales operations effectively. We rely on our inside sales force and certain resellers and distributors to obtain a material portion of our new customers. We plan to continue to expand our inside sales force worldwide. Our ability to achieve growth in revenue in the future will depend on our success in recruiting, training and retaining sufficient numbers of inside sales personnel, and on the productivity of those personnel. Our recent and planned personnel additions may not become as productive as we would like, and we may be unable to hire or retain sufficient numbers of qualified individuals in the future in the markets where we do or plan to do business. Our operating results will be harmed if these expansion efforts do not generate a corresponding increase in revenue.

Our ability to sell our solutions is dependent on the quality of our technical support services, and our failure to offer high quality technical support services would have a material adverse effect on our sales and results of operations.

        Once our products are deployed within our end-users' systems, our end-users depend on our technical support services, as well as the support of our channel partners, to resolve any issues relating to our products. We believe a key differentiator of our solutions and a critical part of our business strategy is our continued focus on providing high-quality customer support. If we or our channel partners do not effectively assist our customers in deploying our products, succeed in helping our customers quickly resolve post-deployment issues and provide effective ongoing support, our ability to sell additional solutions to existing customers would be adversely affected and our reputation with potential customers could be damaged. As a result, our failure to maintain high-quality support services would have a material adverse effect on our business, financial condition and results of operations.

Our products may contain undetected defects, errors or vulnerabilities that could expose us to legal liability and adversely affect our business and reputation.

        Our products may contain material defects, errors or vulnerabilities that may cause them to fail to perform in accordance with the expectations of our customers. In particular, such defects, errors and vulnerabilities may exist or occur in newly released products or in products that we intend to release in the future, despite our efforts to test these products prior to their release. Detecting, analyzing and remedying such defects, errors and vulnerabilities may prove costly and time-consuming and divert management attention or may prove to be not possible at all. Even if we are able to remedy defects, errors and vulnerabilities in our products, such defects, errors or vulnerabilities can still cause product sale interruptions, loss of existing or potential customers, require us to offer refunds to our customers, damage our reputation and market acceptance and expose us to legal claims, such as claims based on product liability, tort, breach of warranty or other types of claims for damages, which could prove considerable if

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limitation of liability and/or indemnity provisions in our contracts should not prove to be enforceable in the event of a dispute. This may have a material adverse effect on our financial position. Defending against such claims may be costly and time-consuming and may divert management attention. Our existing product liability insurance coverage may be insufficient and adequate insurance coverage may be costly to obtain or may not be obtainable at all.

Failure of our security solutions to detect viruses or security breaches or failure to identify spam or spyware could harm our reputation and adversely affect our business.

        Our antivirus and our intrusion prevention products may fail to detect or prevent malware, viruses, worms, botnets or similar threats due to a number of reasons, such as the evolving nature of such threats and the continual emergence of new threats that we may fail to detect in time to protect our customers' networks. We rely on third-party data center facilities, the operations of which we do not control, to deliver updates of our security products to our end-users. These third-party data centers may also experience technical failures and downtime, and may fail to distribute appropriate updates, or fail to meet the increased requirements of a growing customer base. Any such technical failure, downtime, or failures in general may temporarily or permanently expose our customers' networks, leaving their networks unprotected against the latest security threats. An actual or perceived security breach or infection of the network of one of our customers, regardless of whether the breach is attributable to the failure of our solutions to prevent the security breach, could adversely affect the market's perception of our security products and result in negative publicity, loss of customers and sales, increased costs to remedy any problem, and costly litigation.

False detection of viruses or security breaches or false identification of spam or spyware by our security solutions could adversely affect our business.

        Our antivirus and our intrusion prevention products may falsely detect viruses or other threats that do not actually exist. These false positives may impair the perceived reliability of our solutions and may therefore adversely impact market acceptance of our solutions. Also, our antispam and antispyware services may falsely identify emails or programs as unwanted spam or potentially unwanted programs, or alternatively fail to properly identify unwanted emails or programs, particularly since spam emails and spyware are often designed to circumvent antispam or antispyware products. Parties whose emails or programs are blocked by our products may seek redress against us for labeling them as spammers or spyware, or for interfering with their business. In addition, false identification of emails or programs as unwanted spam or potentially unwanted programs may reduce the adoption of our solutions. If our system restricts important files or applications based on falsely identifying them as malware or some other item that should be restricted, this could adversely affect end-users. Any such false identification of important files or applications could result in negative publicity, loss of customers and sales, increased costs to remedy any problem, and costly litigation.

We will be less effective in managing our business if we fail to timely and accurately track the number and retention rates of our customers, in particular our business customers.

        Our customers include individual consumers and business customers. We define business customers as customers (other than individual consumers) that have purchased one or more of our products under a unique customer identification number within the past three years. We have implemented systems to accurately monitor the number and the retention rates of these customers as well as their purchase of upgrades and subscriptions, and we are continuously working to improve the effectiveness of these systems to avoid misallocations and double-counting of customers. We believe that these systems are and will continue to be an effective tool for tracking our customers across our business. Should we fail to accurately and timely monitor our key performance indicators, or fail to adjust and amend our systems in the event that we grow, introduce new products or acquire new businesses, we will become less effective in the

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management of our business and our ability to react to market trends and developments will be impaired. Furthermore, a material miscalculation of our customers and their retention rate could result in the market perceiving that we are under-performing or over-performing, which would have to be adjusted in future periods. As a result, our operating results may be materially and adversely affected.

We rely on our management team and need additional personnel to grow our business, and the loss of one or more key employees or our inability to attract, train and retain qualified personnel could harm our business.

        We largely depend on the experience and knowledge of certain key employees, including developers, key sales and marketing personnel and key members of management, including our executive officers, in the development, marketing and distribution of our solutions and in the performance of our business operations. We are facing intense competition in our industry for qualified employees and our future performance is dependent on our ability to retain or timely hire and train key employees. This also applies to members of our executive management who have extensive experience in our industry. If we fail to retain these individuals or to timely hire adequate replacements, our competitive position and our business operations could suffer. Locating, hiring and training new key employees may also prove costly and time-consuming, in particular, because the labor markets in some of the regions we are operating in are small and underdeveloped with respect to our industry. We may be required to pay increased compensation to hire new qualified personnel. Our inability to attract and retain the necessary personnel could adversely affect our business.

We use a number of data centers to deliver our solutions. Any disruption of service at these facilities could harm our business.

        We host many of our solutions and serve our customers from third-party data center facilities. We do not control the operation of these facilities. The owners of these data center facilities have no obligation to renew their agreements with us on commercially reasonable terms, or at all. If we are unable to renew these agreements on commercially reasonable terms, we may be required to transfer to new data center facilities, and we may incur significant costs and possible service interruption in connection with doing so. In addition, any changes in service levels at our data centers that result in errors, defects, disruptions or other performance problems with our solutions could harm our reputation and may damage our business customers' businesses. Performance problems with our solutions might reduce our revenue, cause us to issue credits to customers, subject us to potential liability, cause customers to terminate their subscriptions or harm our renewal rates.

        Our data center facilities are also vulnerable to damage or interruption from human error, intentional bad acts, pandemics, earthquakes, hurricanes, floods, fires, war, terrorist attacks, power losses, hardware failures, systems failures, telecommunications failures and similar events. The occurrence of a natural disaster or an act of terrorism, or vandalism or other misconduct, a decision to close the facilities without adequate notice or other unanticipated problems could result in lengthy interruptions in our services.

Adverse economic conditions or reduced IT spending may adversely impact our revenue and operating results.

        Our business depends on the overall demand for IT and on the economic health of our current and prospective customers. The use of our solutions is often discretionary and may involve a commitment of capital and other resources. Weak economic conditions, or a reduction in IT spending even if economic conditions improve, would likely adversely impact our business, operating results and financial condition in a number of ways, including by lengthening sales cycles, lowering prices for our solutions and reducing sales.

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If we are not able to acquire and successfully integrate future acquisitions, our operating results and prospects could be harmed.

        We have made several acquisitions in recent years and expect to continue making acquisitions in the future. The success of our acquisition strategy will depend on our ability to identify, negotiate, complete and integrate acquisitions and, if necessary, to obtain satisfactory debt or equity financing to fund those acquisitions. Mergers and acquisitions are inherently risky, and any mergers and acquisitions we complete may not be successful. Any mergers and acquisitions we undertake would involve numerous risks, including the following:

    difficulties in integrating and managing the operations, technologies and products of the companies we acquire;

    diversion of our management's attention from normal daily operations of our business;

    inability to maintain the key business relationships and the reputations of the businesses we acquire;

    uncertainty of entry into markets in which we have limited or no prior experience and in which competitors have stronger market positions;

    dependence on unfamiliar affiliates and partners of the companies we acquire;

    insufficient revenue to offset our increased expenses associated with acquisitions;

    responsibility for the liabilities of the businesses we acquire;

    inability to maintain internal standards, controls, procedures and policies; and

    potential loss of key employees or termination of key commercial agreements of the companies we acquire.

        In addition, we may be unable to secure the equity or debt funding necessary to finance future acquisitions on terms that are acceptable to us. If we finance acquisitions by issuing equity or convertible debt securities, our existing shareholders will likely experience ownership dilution, and if we finance future acquisitions with debt funding, we will incur incremental interest expense and may have to comply with financing covenants or pledge certain of our assets.

Our success depends on our customers' continued high-speed access to the Internet and the continued reliability of the Internet infrastructure.

        Because the majority of our solutions are designed to work over the Internet, our revenue growth depends on our customers' high-speed access to the Internet, as well as the continued maintenance and development of the Internet infrastructure. The future delivery of our solutions will depend on third-party Internet service providers to expand high-speed Internet access, to maintain a reliable network with the necessary speed, data capacity and security and to develop complementary products and services, including high-speed modems, for providing reliable and timely Internet access and services. The success of our business depends directly on the continued accessibility, maintenance and improvement of the Internet as a convenient means of customer interaction, as well as an efficient medium for the delivery and distribution of information by businesses to their employees. All of these factors are beyond our control.

Our business is subject to the risks of earthquakes, fire, power outages, floods and other catastrophic events, and to interruption by man-made problems such as terrorism.

        A significant natural disaster, such as an earthquake, fire or a flood, or a significant power outage could have a material adverse impact on our business, operating results and financial condition. In addition, acts of terrorism could cause disruptions in our business or the business of our service providers, logistics providers, channel partners, or customers or the economy as a whole. Our existing insurance

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coverage against these events or the interruption of our business may be insufficient, and adequate insurance coverage may be costly to obtain or may not be obtainable at all. Any disruption in the business of our service providers, logistics providers, channel partners or customers that impacts sales could have a significant adverse impact on our quarterly results. All of the aforementioned risks may be augmented if the disaster recovery plans for us, our service providers, our channel partners or others prove to be inadequate. To the extent that any of the above results in decreased purchases of our products or the delay in the delivery of our products, our business, financial condition and results of operations would be adversely affected.

We generate significant revenue from member countries of the European Union and our business may suffer in case of a prolonged and deepening economic crisis in Europe.

        We generate a material portion of our revenue from member countries of the European Union. Financial markets remain concerned about the continuing economic crisis in the European Union, in particular with respect to the deficits of countries such as Greece, Portugal, Ireland, Spain and Italy. Despite efforts to stabilize the economic conditions of these countries, concerns remain about the ability of these countries to meet future financial obligations, their debt levels, the stability of the euro currency and the stability of the euro economic zone as a whole. In addition, political discussion and conflicting national interests of the various certain member states in connection with the rescue measures have ignited discussions about re-introducing national currencies, which could ultimately lead to abandoning the euro as a single currency. In this event, we would face increased currency risks and would have to value our euro-denominated assets under national currencies. We cannot assess the effects of such a re-evaluation on our financial position, but our financial position could be materially adversely affected as a result. In addition, the crisis could have a negative effect on finance markets generally and could lead to significantly weakened economies throughout Europe. As a result, our existing and potential future customers may have less cash available to invest in software solutions and may decide not to purchase our products and/or updates, which could have a materially adverse effect on our financial position.

Risks Related to Intellectual Property

The success of our business depends on our ability to protect and enforce our intellectual property rights.

        We rely primarily on a combination of copyright, trademark, trade dress, unfair competition and trade secret laws, as well as confidentiality procedures and contractual restrictions, to establish and protect our proprietary rights. These laws, procedures and restrictions provide only limited protection. In addition, we hold two patents in the United States and have one other filed patent application, but a patent may not be issued with respect to this application. Our existing intellectual property rights protection may be challenged, invalidated or circumvented, and may not provide sufficiently broad protection or may not prove to be enforceable in actions against alleged infringers and additional or more effective protection may be costly to obtain or may not be obtainable at all.

        We endeavor to enter into agreements with our employees and contractors and with parties with which we do business in order to limit access to and disclosure of our proprietary information. We cannot be certain that the steps we have taken will prevent unauthorized use or reverse engineering of our technology. Moreover, others may independently develop technologies that are competitive to ours or infringe our intellectual property. The enforcement of our intellectual property rights also depends on our legal actions against these infringers being successful, but these actions may not be successful, even when our rights have been infringed, and such actions may be costly and time-consuming and bind our resources.

        Furthermore, effective copyright, trademark, trade dress, patent, unfair competition and trade secret protection may not be available in every country in which our products are available over the Internet. In addition, the applicable legal standards and their interpretation relating to the validity, enforceability and scope of protection of intellectual property rights are uncertain and evolving. This includes the protection

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of our licenses, which may be deemed unenforceable under the laws of some jurisdictions. Challenges to the enforceability of our licenses could expose us to costly and time-consuming litigation and may adversely affect our business and results of operations. Changes in the copyright, trademark, trade dress, patent, unfair competition and trade secret laws we rely on, or changes in their interpretation, may adversely affect the protection of our proprietary rights. Insufficient or ineffective protection of our intellectual property rights may adversely affect our revenue and results of operations.

Our products could infringe third-party intellectual property rights, which could result in material costs.

        We are subject to intellectual property infringement claims and may continue to be subject to such claims in the future. These claims may occur for a variety of reasons, including the expansion of our product lines through product development and acquisitions, an increase in patent infringement litigation commenced by non-practicing entities, or so-called patent trolls, increased market exposure as a public company, an increase in the number of competitors in our industry segments and the resulting increase in the number of related products and the overlap in the functionality of those products, and the unauthorized use of a third party's code in our product development process. In addition, companies and inventors are more frequently seeking to patent software. As a result, we could receive more patent infringement claims.

        Responding to any intellectual property infringement claim, whether such claim is made against us or against our customers, regardless of its validity, could result in litigation costs, monetary damages or injunctive relief or require us to obtain a license to intellectual property rights of those third parties. Licenses may not be available on reasonable terms, on terms compatible with the protection of our proprietary rights, or at all. In addition, attention to these claims could divert our management's time and attention from developing our business. If a successful claim is made against us and we fail to develop or license a substitute technology or negotiate a suitable settlement arrangement, our business, results of operations, financial condition and cash flows could be materially and adversely affected. In particular, a material adverse impact on our financial condition could occur in the period in which the effect of an unfavorable final outcome becomes probable and reasonably estimable.

We use software licensed from third parties, which we may not be able to retain or which could cause errors in our products and harm to our customers.

        We rely on software and intellectual property rights licensed from third parties in certain of our products. Such software licensed from third parties could cause errors or failure of our solutions and, as a result, harm to our customers, which could materially affect our reputation and our financial position and expose us to possible litigation. We may also not be able to retain such licenses in the future or license other third-party software or intellectual property rights required for the operation of our business. Failure to maintain effective third-party licensing arrangements with respect to our solutions could harm our business, operating results and financial condition.

Indemnity provisions in various agreements potentially expose us to liability for intellectual property infringement and other losses.

        Our agreements with many of our customers and channel partners include indemnification provisions under which we agree to indemnify them for losses suffered or incurred as a result of claims of intellectual property infringement and, in some cases, for other damages, such as damages caused by us to property or persons. For customers who purchase perpetual licenses, the terms of these indemnity provisions are perpetual. In other agreements, the indemnity provision may survive termination of the agreement. Large indemnity payments could harm our business, operating results and financial condition.

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Our use of open source software could negatively impact our ability to sell our solutions and subject us to possible litigation.

        The products or technologies acquired, licensed or developed by us may incorporate open source software, and we may incorporate open source software into other products in the future. Such open source software is generally licensed by its authors or other third parties under open source licenses that may include conditions that limit our rights to use them. We monitor our use of open source software in an effort to avoid subjecting our products to conditions we do not intend. Although we believe that we have complied with our obligations under the various applicable licenses for open source software that we use such that we have not triggered any of these conditions, there is little or no legal precedent governing the interpretation of many of the terms of these types of licenses. As a result, the potential impact of these terms on our business may result in unanticipated obligations regarding our products and technologies, such as requirements that we offer our products that use the open source software for no cost, that we make available source code for modifications or derivative works we create based upon, incorporating or using the open source software, and/or that we license such modifications or derivative works under the terms of the particular open source license.

        If an author or other third party that distributes open source software were to allege that we had not complied with the conditions of one or more of these licenses, we could be required to incur significant legal expenses defending against such allegations. If our defenses were not successful, we could be subject to significant damages, enjoined from the distribution of our products that contained the open source software, and required to comply with the terms of the applicable license, which could disrupt the distribution and sale of some of our solutions. In addition, if we combine our proprietary software with open source software in an unintended manner, under some open source licenses we could be required to release the source code of our proprietary software, which could substantially help our competitors develop products that are similar to or better than ours.

        In addition to risks related to license requirements, usage of open source software can lead to greater risks than use of third-party commercial software, as open source licensors generally do not provide warranties or assurance of title or controls on the origin of the software.

Risks Related to Our Financial Condition

Our independent registered public accounting firm has communicated several material weaknesses in our internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected and corrected on a timely basis and these material weaknesses could impair our ability to comply with the accounting and reporting requirements applicable to public companies.

        In connection with the audit of our 2008, 2009 and 2010 financial statements which were completed concurrently, our independent registered public accounting firm communicated several material weaknesses related to our business combination accounting, share-based compensation accounting, accounting for non-routine financing transactions, revenue recognition, accounting for current and deferred taxes, and our financial statement close process. Although we have made significant progress during 2011 and have remediated three of these deficiencies, in connection with the audit of our 2011 consolidated financial statements, our independent registered public accounting firm reported to our audit committee that the material weaknesses related to revenue recognition, accounting for current and deferred taxes and our financial statement close process remain.

        Under standards established by the Public Company Accounting Oversight Board, a material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected and corrected on a timely basis.

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        We concurred with the findings of our independent registered public accounting firm. We are working to remediate the material weaknesses and are taking numerous steps and plan to take additional steps to remediate the underlying causes of the material weaknesses. We discuss these steps in further detail in "Operating and Financial Review and Prospects—Internal Control Over Financial Reporting" included elsewhere in this prospectus. The actions that we are taking are subject to ongoing senior management review, as well as audit committee oversight. Although we plan to complete this remediation process as quickly as possible, we cannot at this time estimate how long it will take, and our initiatives may not prove to be successful in remediating these material weaknesses. If we are unable to successfully remediate these material weaknesses, and if we are unable to produce accurate and timely financial statements, our stock price may be adversely affected and we may be unable to maintain compliance with applicable stock exchange listing requirements.

        In addition, we may need to evaluate our internal controls over financial reporting in connection with Section 404 of the Sarbanes-Oxley Act as early as fiscal year 2013 and our auditors may be required to attest to our internal controls over financial reporting starting with our annual report for fiscal year 2014. This assessment will need to include disclosure of any material weaknesses in our internal control over financial reporting identified by our management, as well as our auditors' attestation report on our internal control over financial reporting. Any weaknesses in our internal control over financial reporting may adversely affect our ability to maintain required disclosure controls and procedures. We are just beginning the costly and challenging process of compiling the system and processing documentation needed to comply with such requirements. We may not be able to complete our evaluation, testing and any required remediation in a timely fashion. During the evaluation and testing processes, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to conclude that our internal control over financial reporting is effective. If we are unable to conclude that our internal control over financial reporting is effective, or if our auditors express an adverse opinion on the effectiveness of our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, which could have a material adverse effect on the price of our common shares.

        However, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act until the later of the year following our first annual report required to be filed with the United States Securities and Exchange Commission, or the "SEC," or the date we are no longer an "emerging growth company" as defined in the Jumpstart Our Business Startups Act of 2012, or the "JOBS Act," if we take advantage of the exemptions contained in the JOBS Act. We will remain an emerging growth company for up to five years, although if the market value of our common shares that are held by non-affiliates exceeds $700 million as of any July 31 before the end of that five-year period, we would cease to be an emerging growth company as of the following January 31.

We are an "emerging growth company" and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common shares less attractive to investors.

        We are an "emerging growth company," as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies but not to emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. We cannot predict if investors will find our common shares less attractive because we intend to rely on these exemptions. If some investors find our common shares less attractive as a result, there may be a less active trading market for our common shares and our share price may be more volatile.

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Our quarterly revenue and operating results have fluctuated in the past and may fluctuate in the future due to a number of factors. As a result, we may fail to meet or exceed the expectations of securities analysts or investors, which could cause our share price to decline.

        We believe our quarterly revenue and operating results may vary significantly in the future. As a result, you should not rely on the results of any one quarter as an indication of future performance, and period-to-period comparisons of our revenue and operating results may not be meaningful.

        Our quarterly results of operations may fluctuate as a result of a variety of factors including, but not limited to, those listed below, many of which are outside of our control:

    our inability to increase sales to existing customers and to attract new customers;

    the timing and success of new product introductions by us or our competitors;

    changes in our pricing policies or those of our competitors;

    higher marketing expenditures;

    the mix of our direct and indirect sales;

    the amount and timing of operating expenses and capital expenditures related to the expansion of our operations and infrastructure;

    the timing of revenue and expenses related to the development or acquisition of technologies, products or businesses;

    the mix of Billings between offerings that have different revenue recognition characteristics;

    potential goodwill and intangible asset impairment charges and amortization associated with acquired businesses;

    potential foreign exchange gains and losses related to expenses and sales denominated in currencies other than the functional currency of an associated entity; and

    general economic, industry and market conditions that impact expenditures for collaboration, IT infrastructure and MSP software solutions in the countries where we sell our software.

        Fluctuations in our quarterly operating results might lead analysts to change their models for valuing our common shares. As a result, our share price could decline rapidly and we could face costly securities class action suits or other unanticipated issues.

We rely significantly on revenue from subscriptions and support services which may decline, and, because we recognize revenue from subscriptions and support services over the term of the relevant service period, downturns or upturns in sales are not immediately reflected in full in our operating results.

        Sales of new or renewal subscriptions and support services contracts may decline or fluctuate as a result of a number of factors, including customers' level of satisfaction with our solutions, the prices of our solutions, the prices of solutions offered by our competitors or reductions in our customers' spending levels. If our sales of new or renewal subscriptions and support services contracts decline, our revenue and revenue growth may decline and our business will suffer. In addition we recognize subscriptions and support services revenue monthly over the term of the relevant service period, which is typically one year but has been as long as five years. As a result, much of the revenue we report each quarter is the recognition of deferred revenue from subscriptions and support services contracts entered into during previous quarters. Consequently, a decline in new or renewed subscriptions or support services contracts in any one quarter will not be fully reflected in revenue in that quarter, but will negatively affect our revenue in future quarters. Accordingly, the effect of significant downturns in new or renewed sales of our subscriptions or services are not reflected in full in our results of operations until future periods.

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Our debt obligations contain restrictions that impact our business and expose us to risks that could adversely affect our liquidity and financial condition.

        At December 31, 2011 we had approximately $203.2 million of principal outstanding under our senior secured credit facility. Our senior secured credit facility contains various covenants that will continue to be operative so long as it remains outstanding. The covenants, among other things, limit our and certain of our subsidiaries' ability to:

    incur additional indebtedness;

    create additional liens on our assets;

    pay dividends and make other distributions on our share capital, and redeem and repurchase our outstanding shares;

    make investments, including acquisitions;

    enter into mergers or consolidations or sell assets;

    sell our subsidiaries;

    engage in sale and leaseback transactions; and

    enter into transactions with affiliates.

        Our senior secured credit facility also contains numerous affirmative covenants. In addition, we are required under our senior secured credit facility to continue to comply with a leverage ratio and a fixed charge coverage ratio. See "Operating and Financial Review and Prospects—Liquidity and Capital Resources—2011 Senior Secured Credit Facility." Further, the obligations under our senior secured credit facility will continue to be subject to mandatory prepayment in certain circumstances in addition to regularly scheduled amortization payments, including upon certain asset sales or receipt of casualty event proceeds, upon certain issuances of equity securities or debt, and annually, with a portion of our excess cash flow. Even if we comply with all of the applicable covenants, the restrictions on the conduct of our business could adversely affect our business by, among other things, limiting our ability to take advantage of financings, mergers, acquisitions and other corporate opportunities that may be beneficial to the business. Even if our senior secured credit facility is repaid or otherwise terminated, any additional debt that we incur in the future could subject us to similar or additional covenants.

        If we are unable to generate sufficient cash flow or otherwise maintain or obtain the funds necessary to make required payments under our senior secured credit facility, or if we fail to comply with the various requirements of our indebtedness, we could default under our senior secured credit facility. Any such default that is not cured or waived could result in an acceleration of the senior secured credit facility, an increase in the applicable interest rates under the credit facility, and a requirement that our subsidiaries that have guaranteed the credit facility pay the obligations in full, and would permit the lenders to exercise remedies with respect to all of the collateral that is securing the credit facility, including substantially all of our and our subsidiary borrower's and guarantors' assets. Thus, any such default could have a material adverse effect on our liquidity and financial condition.

If we are unable to establish fair value for any undelivered component of a customer order, revenue relating to the entire order will be deferred and recognized over future periods. A delay in the recognition of revenue for a significant portion of our sales in a particular quarter may cause our share price to decline.

        In the course of our selling efforts, we typically enter into arrangements that require us to deliver a combination of products and services. We refer to each individual product or service as a "component" of the overall arrangement. These arrangements typically require us to deliver particular components in a future period. As we discuss further in "Operating and Financial Review and Prospects—Critical Accounting Policies—Revenue Recognition," if we are unable to determine the fair value of any

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undelivered components, we are required by IFRS to defer revenue from the entire arrangement rather than just the undelivered components. If we are required to defer revenue from the entire arrangement for a significant portion of our product sales, our revenue for that quarter could fall below our expectations or those of securities analysts and investors, resulting in a decline in our share price.

Challenges to our tax structure by tax authorities may adversely affect our financial position

        The registrant is organized under the laws of the Grand Duchy of Luxembourg and as such is subject to Luxembourg tax laws. We believe that the registrant is resident solely in Luxembourg for tax purposes and that we can rely on this position with respect to the applicability of tax treaties formed between the Grand Duchy of Luxembourg and certain other jurisdictions. If our tax position were to be successfully challenged by the relevant tax authorities, or if there were any changes in applicable tax laws, treaties or regulations or the interpretation thereof, such tax authorities could determine that the registrant is a tax resident of a jurisdiction other than the Grand Duchy of Luxembourg. Such a determination could have a material adverse effect on our financial position and, in particular, result in unforeseen tax liabilities which may be applied retroactively. Such a determination could also result in the holders of our common shares becoming subject to different tax treatment with respect to the acquisition, holding or disposal of our common shares, or any distributions in connection with our common shares.

        In addition, if the relevant tax authorities were to successfully challenge our tax position with respect to our other entities or certain of our material assets, including our intellectual property rights, we could be subject to increased tax rates and penalty payments. If we are unable to implement an adequate and efficient tax structure with respect to our intellectual property rights, certain of these rights may be subject to an increased tax rate, which could have a material adverse effect on our financial position.

Our effective tax rate could increase, which would increase our income tax expense.

        The amount of taxes we are required to pay in the various jurisdictions in which we operate are determined by us based on our interpretation of the applicable tax laws and regulations and our application of the general transfer pricing principles to our cross-border intercompany transactions. If the relevant tax authorities were to determine applicability of a higher tax rate or that a greater portion of our income in their jurisdiction should be subject to income or other taxes in that jurisdiction, our effective tax rate may increase, which could have a material adverse effect on our financial position.

        In general, our effective tax rate could be adversely affected by several factors, many of which are outside of our control, including:

    changes in the relative proportions of income before taxes in the various jurisdictions in which we operate that have differing statutory tax rates;

    changing tax laws, regulations and interpretations in various jurisdictions in which we operate as well as the requirements of certain tax rulings;

    determinations by tax authorities that we have established a taxable presence in certain jurisdictions where we do not currently pay taxes;

    expiration of tax rulings applicable to us and our subsidiaries;

    successful challenges by tax authorities to our transfer pricing; and

    tax assessments, or any related interest or penalties, which could significantly affect our income tax expense for the period in which the settlements take place.

        In respect of the U.S. corporate income tax, we believe that the registrant and each of its non-U.S. subsidiaries operate in a manner that would not subject them to such tax because they are not engaged in a trade or business in the United States. Nevertheless, there is a risk that the U.S. Internal Revenue Service,

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or "IRS," may successfully assert that the registrant or one of our non-U.S. subsidiaries is engaged in a trade or business in the United States, in which case that entity would be subject to U.S. tax at regular corporate rates on income that is effectively connected with the conduct of a U.S. trade or business, plus an additional 30% "branch profits" tax on the dividend equivalent amount, which is generally effectively connected income with certain adjustments, deemed withdrawn from the United States. Any such tax would likely result in a significant increase to our effective tax rate.

        However, a legislative proposal pending in the U.S. Congress, if enacted, could result in us being treated as a U.S. corporation for U.S. federal income tax purposes if it is determined that we are managed and controlled, directly or indirectly, primarily within the United States. If we were treated as a U.S. corporation for U.S. federal income tax purposes, we would be subject to U.S. corporate income tax on our worldwide income, which would significantly increase our effective tax rate.

Our business and financial performance could be negatively impacted by changes in tax laws or regulations.

        New income, sales, use or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time in any of the jurisdictions in which we operate. Further, existing tax laws, statutes, rules, regulations or ordinances could be interpreted, changed, modified or applied adversely to us or our customers. Changes in the taxation of our customers in the jurisdictions in which we have material sales, whether by introduction of new tax laws or application of existing ones, could have a material adverse effect on our business or financial performance, in particular if tax authorities successfully assert that additional transactional taxes should apply to the solutions provided by us or should apply retroactively.

        Any changes to existing tax rules or their interpretation or the introduction of new rules, including with regard to the deductibility of interest expenses, could adversely affect our worldwide business operations, and our business and financial performance. Additionally, these events could require us or our customers to pay additional tax amounts on a prospective or retroactive basis, as well as require us or our customers to pay fines and/or penalties and interest for past amounts deemed to be due. If we raise our product and maintenance prices to offset the costs of these changes, existing customers may elect not to renew their maintenance arrangements and potential customers may elect not to purchase our solutions. Additionally, new, changed, modified or newly interpreted or applied tax rules could increase our customers' and our compliance, operating and other costs, as well as the costs of our solutions. Further, these events could decrease the capital we have available to operate our business. Any or all of these events could have a material adverse effect on our business and financial performance.

If we lose our status as a foreign private issuer, we may incur additional legal, accounting or other expenses to transition our financial reporting system to U.S. GAAP, which differs in certain significant respects from IFRS, and to provide additional disclosures required of U.S. public companies.

        The registrant is currently a "foreign private issuer," as such term is defined in Rule 3b-4 of the Securities and Exchange Act of 1934, as amended, or the "Exchange Act." The registrant can lose its foreign private issuer status if more than 50% of the registrant's shares are held by U.S. persons and any of the following occurs: (1) a majority of its directors and executive officers are U.S. citizens or residents; (2) more than 50% of its assets are located in the United States; or (3) the registrant's business is administered principally in the United States. Under Rule 3b-4 under the Exchange Act, the determination of whether a company is a foreign private issuer is made annually on the last business day of an issuer's most recently completed second fiscal quarter. Accordingly, the first determination as to whether the registrant will continue to be a foreign private issuer after the completion of this offering will be made on June 28, 2013.

        Currently we report our financial statements under IFRS. If we were to lose our status as a foreign private issuer, we will be required under current rules of the SEC, to report our financial statements under U.S. generally accepted accounting principles, or "U.S. GAAP," in our future SEC filings. The transition

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from IFRS to U.S. GAAP would require us to invest a substantial amount of resources and time, and we would be required to convert historical financial statements prepared under IFRS from prior fiscal years into U.S. GAAP financial statements included in our SEC filings. We expect that we would incur significant additional legal, accounting and other expenses in connection with this transition, which may negatively impact our results of operations. Furthermore, there is no guarantee that we would be able to complete the timely transition to U.S. GAAP in order to meet our disclosure obligations under the Exchange Act and failure to do so could result in delayed reporting, delisting and otherwise adversely affect our business and operating results.

        There have been and there may in the future be certain significant differences between U.S. GAAP and IFRS, including differences related to revenue recognition, share-based compensation expense, income tax and the accounting for preferred shares and earnings per share. As a result, our financial information and reported earnings for future periods within a fiscal year or any interim period could be significantly different if they were prepared in accordance with U.S. GAAP. We do not intend to provide a reconciliation between IFRS and U.S. GAAP unless it is required under applicable law. Consequently, if we were required to begin reporting in U.S. GAAP, you may not be able to meaningfully compare our financial statements under U.S. GAAP with our historical financial statements under IFRS.

        If we lose our status as a foreign private issuer, we will be required to comply with certain more detailed and extensive reporting and other requirements applicable to U.S. domestic issuers and will likely incur significant additional legal, accounting and other expenses associated with such compliance, which may adversely affect our results of operations.

Our results of operations may be adversely affected by changes in accounting standards or interpretations of accounting standards.

        We prepare our financial statements in conformity with IFRS. These principles are subject to interpretation by various bodies formed to interpret and create appropriate accounting standards, and from time to time the International Accounting Standards Board and the SEC issue new financial accounting and reporting guidance or interpretations of those standards. These changes are beyond our control, can be hard to predict and could materially impact how we report our results of operations and financial condition. We could be required to apply a new or revised standard retroactively, resulting in our restating prior period financial statements in material amounts. Furthermore future changes in accounting standards or interpretations may require us to divert financial resources and increase managerial oversight to ensure compliance with these changes.

        We continuously review our compliance with all new and existing revenue recognition accounting pronouncements. Depending upon the outcome of these ongoing reviews and the potential issuance of further accounting pronouncements, implementation guidelines and interpretations, we may be required to modify our reported results, revenue recognition policies or business practices, which could harm our results of operations.

Currency exchange rate fluctuations may have a negative effect on our financial condition.

        We are exposed to fluctuations in currency from sales of our products and purchases of goods, services and equipment and funding denominated in the currencies of several countries. In particular, we are exposed to the fluctuations in the exchange rate between the dollar and the euro. In 2011, based on the functional currency of our subsidiaries, 39% of our revenue was accounted for in euros and 16% of our revenue was accounted for in pounds sterling, while the remainder was largely accounted for in dollars. We anticipate that the majority of revenue from our products will continue to be in euros, dollars and pounds sterling. Fluctuations in currency exchange rates may affect our results of operations and the value of our assets and revenue, and increase our liabilities and costs, which in turn may adversely affect reported earnings and the comparability of period-to-period results of operations. See "Operating and Financial

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Review and Prospects—Quantitative and Qualitative Disclosures about Market Risk—Foreign Currency Risk."

        In addition, due to the constantly changing currency exposures and the potential substantial volatility of currency exchange rates, we cannot predict the effect of exchange rate fluctuations on our future results and, because we do not currently hedge fully against all currency risks and fluctuations between the dollar and the euro, such fluctuations may result in currency exchange rate losses. Fluctuations in exchange rates could result in our realizing a lower profit margin on sales of our products than we anticipate at the time of entering into commercial agreements. Adverse movements in exchange rates could have a material adverse effect on our financial condition and results of operations.

Pending or future litigation could have a material adverse impact on our results of operation, financial condition and liquidity.

        From time to time, we have been, and may be in the future, subject to lawsuits brought against us by our competitors, individuals or other entities. Where we can make a reasonable estimate of the liability relating to pending litigation and determine that an adverse liability resulting from such litigation is probable, we record a related contingent liability. As additional information becomes available, we assess the potential liability and revise estimates as appropriate. This litigation may also generate negative publicity that significantly harms our reputation, which may materially and adversely affect our user base and the number of our customers. In addition to the related cost, managing and defending litigation and related indemnity obligations can significantly divert management's and the Board's attention from operating our business. We may also need to pay damages or settle the litigation with a substantial amount of cash. All of the foregoing could have a material adverse impact on our business, results of operation and cash flows.

Our failure to raise additional capital or generate the cash flows necessary to expand our operations and invest in our solutions could negatively impact our ability to compete successfully.

        We may need to raise additional funds, and we may not be able to obtain additional debt or equity financing under the terms of our senior secured credit facility or on favorable terms, if at all. If we raise additional equity financing, our shareholders may experience significant dilution of their ownership interests, and the per share value of our common shares could decline. If we engage in debt financing, we may be required to accept terms that restrict our ability to incur additional indebtedness and force us to maintain specified liquidity or other ratios. If we need additional capital and cannot raise it on acceptable terms, we may not be able to, among other things:

    develop or enhance our products;

    continue to expand our development, sales and marketing organizations;

    acquire complementary technologies, products or businesses;

    expand our operations throughout the world;

    hire, train and retain employees; or

    respond to competitive pressures or unanticipated working capital requirements.

Goodwill represents a significant amount of our total assets, and a future write-off could result in increased losses and a reduction of our total equity.

        As of December 31, 2011, the net value of our goodwill and other intangible assets was $311.8 million, or 84.7% of our total assets. We are no longer required or permitted to amortize goodwill reflected on our balance sheet. We are, however, required to evaluate goodwill reflected on our balance sheet when circumstances indicate a potential impairment, or at least annually, under the impairment testing guidelines outlined in the standard. Future changes in the cost of capital, expected cash flows, or other

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factors may cause our goodwill to be impaired, resulting in a non-cash charge against results of operations to write off goodwill for the amount of impairment. If a future write-off is required, the charge could have a material adverse effect on our reported results of operations and total equity in the period of any such write-off.

Risks Related to This Offering

Our common share price could be highly volatile and may trade below the initial public offering price.

        We will negotiate with the representatives of the underwriters to determine the initial public offering price of our common shares. The realization of any of the risks described in these "Risk Factors" or other unforeseen risks could have a dramatic and adverse effect on the market price of our common shares. In particular, and in addition to circumstances described elsewhere in these "Risk Factors," the following events or factors can adversely affect the market price of our common shares:

    announcements of technological innovations or new products by us or others;

    general market conditions;

    changes in government regulations or patent decisions;

    developments by our channel partners;

    fluctuations in our recorded revenue, even during periods of significant sales order activity;

    changes in estimates of our financial results or recommendations by securities analysts;

    failure of any of our solutions to achieve or maintain market acceptance;

    changes in market valuations of similar companies;

    success of competitive products or services;

    changes in our capital structure, such as future issuances of securities or the incurrence of debt;

    announcements by us or our competitors of significant services, contracts, acquisitions or strategic alliances;

    regulatory developments in the countries in which we operate;

    litigation involving our company, our general industry or both;

    additions or departures of key personnel; and

    general perception of the future of the collaboration, IT infrastructure and MSP software solutions markets;

        Additionally, market prices for securities of technology companies historically have been very volatile. The market for these securities has from time to time experienced significant price and volume fluctuations for reasons unrelated to the operating performance of any one company. As a result of this volatility, investors may not be able to sell their common shares at or above the initial public offering price. In the past, following periods of market volatility, shareholders have often instituted securities class action litigation. If we were involved in securities litigation, it could have a substantial cost and divert resources and attention of management from our business.

Our common shares have no prior trading history in the United States or elsewhere, and an active market may not develop.

        Prior to this offering there has been no public market for our common shares. The initial public offering price for our common shares will be determined through negotiations with the underwriters and may bear no relationship to the price at which the common shares will trade upon completion of this offering. Although we have applied to have our common shares listed on the                        , an active

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trading market for our common shares may never develop or may not be sustained following this offering. If an active market for our common shares does not develop, it may be difficult to sell your shares at all.

If the ownership of our common shares continues to be highly concentrated, it may prevent you from influencing significant corporate decisions and the interests of our principal shareholder may conflict with your interests.

        Following the completion of this offering, Insight will beneficially own approximately            % of our outstanding common shares, or            % if the underwriters' over-allotment option is fully exercised. This concentration of share ownership may adversely affect the trading price for our common shares because investors often perceive disadvantages in owning shares in companies with controlling shareholders. Also, Insight will be able to control our management and affairs and matters requiring shareholder approval, including the election of directors and the approval of significant corporate transactions, such as mergers, consolidations or the sale of substantially all of our assets. Consequently, this concentration of ownership may have the effect of delaying or preventing a change of control, including a merger, consolidation or other business combination involving us, or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control, even if that change of control would benefit our other shareholders.

Our shareholders have the right to, and have no duty to abstain from exercising such right to, engage or invest in the same or similar businesses as us.

        Our shareholders have other business activities in addition to their ownership of us. Our shareholders have the right to, and have no duty to abstain from exercising such right to, engage or invest in the same or similar business as us, do business with any of our customers, partners or vendors or employ or otherwise engage any of our officers, directors or employees. If our shareholders or any of their officers, directors or employees acquire knowledge of a potential transaction that could be a corporate opportunity, they have no duty to offer such corporate opportunity to us, our shareholders or our affiliates.

        In the event that any of our directors and officers who is also a director, officer or employee of one of our shareholders acquires knowledge of a corporate opportunity or is offered a corporate opportunity, provided that this knowledge was not acquired solely in such person's capacity as our director or officer and such person acted in good faith, then such person is deemed to have fully satisfied such person's fiduciary duty and is not liable to us if such shareholder pursues or acquires such corporate opportunity or if such person did not present the corporate opportunity to us.

Raising additional capital by issuing securities may cause dilution to existing shares.

        We expect the proceeds of this offering to be sufficient to meet our current cash requirements. However, our future capital requirements will depend on many factors, including:

    the extent to which we acquire or invest in businesses, products or technologies and other strategic relationships;

    the costs of protecting our intellectual property, including preparing, filing and prosecuting intellectual property registrations and defending intellectual property-related claims; and

    the costs of financing unanticipated working capital requirements and responding to competitive pressures.

        Additional financing may not be available on terms favorable to us, or at all. If adequate funds are not available or are not available on acceptable terms, our ability to fund our expansion, take advantage of unanticipated opportunities, develop or enhance our solutions or otherwise respond to competitive pressures would be significantly limited.

        If we raise additional funds through licensing arrangements with third parties, we may have to relinquish valuable rights to our solutions, or grant licenses on terms that are not favorable to us. If we

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raise additional funds by issuing equity or convertible debt securities, we will reduce the percentage ownership of our then-existing shareholders, and these securities may have rights, preferences or privileges senior to those of our existing shareholders.

You will experience immediate and substantial dilution.

        The initial public offering price is substantially higher than the net tangible book value of each outstanding common share. As a result, purchasers of our common shares in this offering will suffer immediate and substantial dilution. The dilution will be $            per share in the net tangible book value of the common shares from the initial public offering price. If the underwriters sell additional shares following the exercise of their option to purchase additional shares or if option holders exercise outstanding options to purchase common shares, further dilution could occur. We describe this dilution in greater detail under "Dilution" in this prospectus.

The requirements of being a public company may strain our resources, divert management's attention and affect our ability to attract and retain executive management and qualified board members.

        As a public company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, the listing requirements of            and other applicable securities rules and regulations. Compliance with these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources, particularly after we are no longer an "emerging growth company." As a result, management's attention may be diverted from other business concerns, which could adversely affect our business and operating results. Although we have already hired additional employees to comply with these requirements, we may need to hire more employees in the future or engage outside consultants, which will increase our costs and expenses.

        In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time-consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management's time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and our business may be adversely affected.

        However, for as long as we remain an "emerging growth company" as defined in the JOBS Act, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies but not to emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. We may take advantage of these reporting exemptions until we are no longer an emerging growth company.

        We will remain an emerging growth company for up to five years, although if the market value of our common shares that are held by non-affiliates exceeds $700 million as of any July 31 before that time, we would cease to be an emerging growth company as of the following January 31.

        We also expect that being a public company subject to new rules and regulations will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it

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more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and compensation committee, and qualified executive officers.

If we fail to establish and maintain proper and effective internal control over financial reporting, our operating results and our ability to operate our business could be harmed.

        The Sarbanes-Oxley Act requires, among other things, that we establish and maintain effective internal control over financial reporting and disclosure controls and procedures. For the years ended December 31, 2008, 2009, 2010 and 2011, our independent registered public accounting firm communicated several material weaknesses in our internal control over financial reporting. If this offering becomes effective in 2012, under the SEC's current rules, beginning with the year ending December 31, 2013, we may be required to perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act. Our independent registered public accounting firm will also be required to report on our internal control over financial reporting.

        However, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act until the later of the year following our first annual report required to be filed with the SEC, or the date we are no longer an emerging growth company if we take advantage of the exemptions contained in the JOBS Act. We will remain an emerging growth company for up to five years, although if the market value of our common shares that are held by non-affiliates exceeds $700 million as of any July 31 before the end of that five year period, we would cease to be an emerging growth company as of the following January 31.

        For the years ended December 31, 2009, 2010 and 2011, our independent registered public accounting firm had not been engaged to perform an audit of our internal control over financial reporting. The financial statement audits performed included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of our internal control over financial reporting. Accordingly, when we and our auditors perform tests of control design and operation, additional deficiencies may be identified. Any such additional deficiencies in our internal control over financial reporting may be deemed to be material weaknesses and result in a conclusion that our internal control over financial reporting is ineffective.

        Due to the extent of our international operations, our financial reporting requires substantial international activities, resources and reporting consolidation. We expect to incur substantial accounting and auditing expense and to expend significant management time in complying with the requirements of Section 404. If we are not able to comply with the requirements of Section 404 in a timely manner, or if we or our independent registered public accounting firm identify deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, the market price of our shares could decline and we could be subject to investigations or sanctions by the SEC, the Financial Industry Regulatory Authority, Inc., or "FINRA," or other regulatory authorities. In addition, we could be required to expend significant management time and financial resources to correct any material weaknesses that may be identified or to respond to any regulatory investigations or proceedings.

Holders of our common shares will not be able to trade those shares on any exchange outside the United States.

        We have not applied to list our common shares on any exchange other than in the United States on the            , and we are not planning to apply for listing on any other exchange, whether in the United States or in any other jurisdiction. As a result, a holder of our common shares outside the United States may not be able to sell those common shares as readily as such holder would be able to if our common shares were listed on a stock exchange in that holder's home jurisdiction.

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We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.

        Our management will have broad discretion in the application of the net proceeds from this offering and could spend the proceeds in ways that do not improve our results of operations or enhance the value of our common shares. The failure by our management to apply these funds effectively could result in financial losses and cause the price of our common shares to decline. Pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value, in addition to using a portion of the proceeds to repay certain of our existing indebtedness.

We do not anticipate paying cash dividends on our common shares, which could reduce the return on your investment.

        We do not expect to pay cash dividends on our common shares in the foreseeable future. We currently intend to retain our future earnings, if any, to fund the development and growth of our business. In addition, under the terms of our senior secured credit facility, we are subject to certain restrictions on our ability to declare or pay dividends, and any future debt agreements may preclude us from paying dividends. Accordingly, any return on your investment must come from appreciation.

A significant portion of our total outstanding shares may be sold into the market in the near future. If there are substantial sales of our common shares, the price of our common shares could decline.

        The market price of our common shares could decline as a result of sales of a substantial number of our shares in the public market or the perception in the market that the holders of a large number of shares intend to sell their shares. After this offering, approximately            of our common shares will be outstanding.                            of the holders of common shares, and each director and officer of the Company, subject to certain exceptions described in the section entitled "Underwriters" below, agrees that they will not sell their shares for a period of 180 days after the date of this prospectus. Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC and Jefferies & Company, Inc. may, in their sole discretion, permit our directors, officers and our shareholders and option holders who are subject to the contractual lock-up to sell shares prior to the expiration of the lock-up agreements.

        The 180-day restricted period under the lock-up agreements with the underwriters will be automatically extended if: (1) during the last 17 days of the 180-day restricted period we issue an earnings release or material news or a material event relating to us occurs, or (2) prior to the expiration of the 180-day restricted period, we announce that we will release earnings results during the 16-day period beginning on the last day of the 180-day period.

If securities analysts do not publish research or reports about our business or if they publish negative evaluations of our common shares, the price of our shares could decline.

        We believe that the trading price for our common shares will be affected by research or reports that industry or financial analysts publish about us or our business. If one or more of the analysts who may elect to cover us downgrade their evaluations of our common shares, the price of our common shares could decline. If one or more of these analysts cease coverage of our company, we could lose visibility in the market for our common shares, which in turn could cause our share price to decline.

Risks Related to Investment in a Luxembourg Company

We are organized under the laws of the Grand Duchy of Luxembourg and it may be difficult for you to obtain or enforce judgments against us or our executive officers and directors in the United States.

        We are organized under the laws of the Grand Duchy of Luxembourg. The majority of our assets are located outside the United States. Furthermore, the majority of our directors and officers named in this prospectus reside outside the United States and most of their assets are located outside the United States. As a result, investors may find it difficult to effect service of process within the United States upon us or

38


these persons or to enforce outside the United States judgments obtained against us or these persons in U.S. courts, including judgments in actions predicated upon the civil liability provisions of the U.S. federal securities laws. Likewise, it may also be difficult for an investor to enforce in U.S. courts judgments obtained against us or these persons in courts located in jurisdictions outside the United States, including actions predicated upon the civil liability provisions of the U.S. federal securities laws. It may also be difficult for an investor to bring an original action in a Luxembourg court predicated upon the civil liability provisions of the U.S. federal securities laws against us or these persons. Furthermore, Luxembourg law does not recognize a shareholder's right to bring a derivative action on behalf of the company except in limited cases.

        As there is no treaty in force on the reciprocal recognition and enforcement of judgments in civil and commercial matters between the United States and the Grand Duchy of Luxembourg, courts in Luxembourg will not automatically recognize and enforce a final judgment rendered by a U.S. court. A valid judgment obtained from a court of competent jurisdiction in the United States may be entered and enforced through a court of competent jurisdiction in Luxembourg, subject to compliance with the enforcement procedures (exequatur). The competent jurisdiction in Luxembourg will authorize the enforcement in Luxembourg of the U.S. judgment if it is satisfied that all of the following conditions are met:

    the judgment of the U.S. court is final and enforceable (exécutoire) in the United States;

    the U.S. court had jurisdiction over the subject matter leading to the judgment (that is, its jurisdiction was in compliance both with Luxembourg private international law rules and with the applicable domestic U.S. federal or state jurisdictional rules);

    the U.S. court has applied to the dispute the substantive law that would have been applied by Luxembourg courts;

    the judgment was granted following proceedings where the counterparty had the opportunity to appear and, if it appeared, to present a defense, and the decision of the foreign court must not have been obtained by fraud, but in compliance with the rights of the defendant;

    the U.S. court has acted in accordance with its own procedural laws;

    the judgment of the U.S. court does not contravene Luxembourg international public policy; and

    the U.S. court proceedings were not of a criminal or tax nature.

        Under our articles of association that will be in effect upon completion of our corporate reorganization and also pursuant to separate indemnification agreements, we indemnify and hold our directors harmless against all claims and suits brought against them, subject to limited exceptions. Under our articles of association that will be in effect upon completion of our corporate reorganization, to the extent allowed by law, the rights and obligations among or between us and any of our current or former directors and officers are governed exclusively by the laws of the Grand Duchy of Luxembourg and subject to the jurisdiction of the Luxembourg courts, unless such rights or obligations do not relate to or arise out of their capacities listed above. Although there is doubt as to whether U.S. courts would enforce such provision in an action brought in the United States under U.S. securities laws, such provision could make enforcing judgments obtained outside Luxembourg more difficult to enforce against our assets in Luxembourg or jurisdictions that would apply Luxembourg law.

Our shareholders may have more difficulty protecting their interests than they would as shareholders of a U.S. corporation.

        Our corporate affairs are governed by our articles of association and will be governed by the laws governing joint stock companies organized under the laws of the Grand Duchy of Luxembourg upon completion of our corporate reorganization. The rights of our shareholders and the responsibilities of our directors and officers under Luxembourg law are different from those applicable to a corporation

39


incorporated in the United States. There may be less publicly available information about us than is regularly published by or about U.S. issuers. Also, Luxembourg regulations governing the securities of Luxembourg companies may not be as extensive as those in effect in the United States, and Luxembourg law and regulations in respect of corporate governance matters might not be as protective of minority shareholders as state corporation laws in the United States. Therefore, our shareholders may have more difficulty in protecting their interests in connection with actions taken by our directors and officers or our principal shareholders than they would as shareholders of a corporation incorporated in the United States.

        Neither our articles of association nor Luxembourg law provides for appraisal rights for dissenting shareholders in certain extraordinary corporate transactions that may otherwise be available to shareholders under certain United States state laws. Also, as a foreign private issuer, we will be exempt from certain of the rules and regulations of the Exchange Act, including those with respect to the solicitation of proxy statements, the Section 16 reporting requirements, and insider liability and short swing profit recapture for our directors, officers and at least 10% shareholders. In addition, our filing of annual, quarterly and current reports will also be less extensive, less current and less frequent than those filings of domestic issuers who are subject to the Exchange Act. Furthermore, the fair disclosure requirements of Regulation FD apply only to United States domestic companies. As a result of the differences referenced above, our shareholders may have more difficulty protecting their interests than they would as shareholders of a U.S. company.

Holders of our shares may not be able to exercise their pre-emptive subscription right and may suffer dilution of their shareholding in the event of future share issuances.

        Under Luxembourg law, our shareholders benefit from a pre-emptive subscription right on the issuance of shares for cash consideration. However, we anticipate that our controlling shareholders will, in accordance with Luxembourg law, authorize the Board to suppress, waive or limit any pre-emptive subscription rights of shareholders provided by law to the extent the Board deems such suppression, waiver or limitation advisable for any issuance or issuances of shares within the scope of our authorized share capital. Such shares may be issued above, at or below market value as well as by way of incorporation of available reserves (including premium). In addition, shareholders may not be able to exercise their pre-emptive right or to do so on a timely basis, unless they comply with local corporate and/or securities law in Luxembourg and in the jurisdiction in which the shareholder is resident, in particular in the United States. As a result, the shareholding of such shareholders may be materially diluted in the event future shares are issued.

Luxembourg insolvency laws may offer our shareholders less protection than they would have under U.S. insolvency laws.

        As a company organized under the laws of the Grand Duchy of Luxembourg and with its registered office in Luxembourg, we are in principle subject to Luxembourg insolvency laws in the event any insolvency proceedings are initiated against us. Should courts in another European country determine that the insolvency laws of another European country apply to us, the courts in that country could have jurisdiction over the insolvency proceedings initiated against us. Insolvency laws in Luxembourg or the relevant other European country, if any, may offer our shareholders less protection than they would have under United States insolvency laws and make it more difficult for them to recover the amount they could expect to recover in a liquidation under United States insolvency laws.

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FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA

        This prospectus contains forward-looking statements. The forward-looking statements are contained primarily in the sections entitled "Prospectus Summary," "Risk Factors," "Operating and Financial Review and Prospects" and "Business." These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terms including "anticipates," "believes," "could," "estimates," "expects," "intends," "may," "plans," "potential," "predicts," "projects," "should," "will," "would," and similar expressions intended to identify forward-looking statements. Forward-looking statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties.

        Factors that could cause our actual results to differ materially from those expressed or implied in such forward-looking statements include, but are not limited to:

    our ability to compete in the collaboration, IT infrastructure and MSP software solutions markets;

    our growth strategies;

    our ability to develop and sell new products and product enhancements;

    the termination of or changes to our relationships with our third-party channel partners and other third parties;

    our estimates of future performance;

    our estimates of market sizes and anticipated uses of our products;

    our estimates regarding anticipated operating losses, future revenue, expenses, capital requirements and our needs for additional financing;

    our legal and regulatory compliance efforts;

    our ability to adequately protect our intellectual property;

    our ability to operate our business without infringing the intellectual property rights of others;

    flaws in our internal controls and IT systems;

    our geographic expansion plans;

    a loss of rights to develop and commercialize our products under our license and sublicense agreements;

    a loss of any of our key management personnel; and

    worldwide economic conditions and their impact on the demand for our solutions.

        We discuss many of the foregoing and other risks in this prospectus in greater detail under the heading "Risk Factors." Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our estimates and assumptions as of the date of this prospectus. You should read this prospectus, and the documents that we reference in this prospectus and have filed as exhibits to the registration statement of which this prospectus is a part, completely and with the understanding that our actual future results may be materially different from what we expect. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

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        This prospectus also contains estimates and other information concerning our industry, including market size and growth rates, that are based on industry publications, data from research firms and other third-party sources, surveys, estimates and forecasts, including those generated by IDC, Gartner, Inc. and comScore, Inc. This information involves a number of assumptions and limitations, and you are cautioned not to give undue weight to these estimates. Although we believe the information in these industry publications and third-party sources is reliable, we have not independently verified the accuracy or completeness of the information. In addition, projections, assumptions and estimates of our future performance, industry or market conditions and demographics are inherently imprecise, and the industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in "Risk Factors."

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USE OF PROCEEDS

        We estimate that the net proceeds from the sale of the                    common shares that we are offering will be approximately $                    , after deducting the underwriting discount and commissions and estimated offering expenses of $                    and assuming an initial public offering price of $                    per share, the midpoint of the estimated price range set forth on the cover page of this prospectus. Each $1.00 increase (decrease) in the assumed initial public offering price would increase (decrease) the net proceeds to us from the offering by $                    , assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. For each $1.00 increase (decrease), we would anticipate increasing (decreasing) our investment in our business accordingly. We will not receive any proceeds from the sale of common shares by the selling shareholders. See "Principal and Selling Shareholders."

        The primary purposes of this offering are to create a public market for our common shares, facilitate the possibility of our future access to the public equity markets and partially repay outstanding indebtedness. We will use approximately $             million of our net proceeds from this offering to repay outstanding principal owed by us pursuant to term loans issued under our senior secured credit facility. For additional information about the term loans, see "Operating and Financial Review and Prospects—Liquidity and Capital Resources—Indebtedness—2011 Senior Secured Credit Facility."

        We will use approximately $             million of our net proceeds to repay in full the outstanding principal and accrued interest we owe under nine convertible subordinated promissory notes issued to parties that held our class B preferred participating shares, which we refer to as our "class B preferred shares." For additional information about the convertible subordinated promissory notes, see "Operating and Financial Review and Prospects—Liquidity and Capital Resources—Indebtedness—2011 Convertible Subordinated Promissory Notes."

        We expect to use the remaining net proceeds for working capital and other general corporate purposes, including financing our further growth. Expenditures for future growth could include developing new products, expanding our sales force in international markets and hiring additional personnel to enable us to bring products to market sooner. We may use a portion of our net proceeds to acquire or invest in other businesses, technologies or products, although we currently have no agreements or commitments for any specific acquisitions.

        The amounts and timing of our use of proceeds will vary depending on a number of factors, including the amount of cash generated or used by our operations, the success of our product development efforts, competitive and technological developments, and the rate of growth, if any, of our business. As of the date of this prospectus, we cannot specify with certainty all of the particular uses for the net proceeds to be received upon the completion of this offering. Accordingly, our management will have broad discretion in the allocation of the net proceeds of this offering. Pending the uses described above, we may invest the net proceeds of this offering in cash, cash equivalents, money market funds, government securities or short-term interest-bearing, investment grade securities to the extent consistent with applicable regulations. We cannot predict whether the proceeds will be invested to yield a favorable return.

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CORPORATE REORGANIZATION

        Prior to this offering, we have conducted our business through the registrant, GFI Software S.à r.l., a Luxembourg limited liability company (société à responsabilité limitée) and its direct and indirect subsidiaries. The registrant does not engage in any operations and has only nominal assets, other than a 100% interest in TV GFI Holding Company S.à r.l., or "TV GFI," which itself does not engage in any operations and has only nominal assets and a 100% direct and indirect interest in our operating subsidiaries.

        In connection with this offering, we intend to undergo a corporate reorganization. Pursuant to the corporate reorganization, the registrant will hold an extraordinary general meeting of its shareholders before a Luxembourg notary at which the shareholders will, among other things, approve the following actions:

    a change in the corporate form of the registrant to a Luxembourg joint stock company (société anonyme);

    the restatement of the registrant's articles of association;

    the related conversion of our board of managers into a board of directors; and

    the appointment of such directors.

        Upon completion of the extraordinary general meeting, the Luxembourg notary will file and arrange for publication of the notarial deed. The corporate reorganization will be effective upon the passing of the notarial deed and enforceable against third parties upon publication of such notarial deed in accordance with Luxembourg law.

        Our corporate reorganization will not affect our operations, which we will continue to conduct through our operating subsidiaries.

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DIVIDEND POLICY

        In October 2011, we distributed €105.0 million (approximately $145.0 million) to the holders of our then-existing class B preferred shares. This distribution reduced the liquidation preference on the class B preferred shares by the same amount. In November 2011, in connection with the elimination of the preference on our then-existing class B preferred shares and the conversion of the class B preferred shares into an equivalent number of class A common shares, we undertook a second distribution of €9.0 million (approximately $12.2 million) and issued convertible subordinated promissory notes to the holders of our class B preferred shares for the balance of the remaining preference on the class B preferred shares. See "Operating and Financial Review and Prospects—Indebtedness—2011 Convertible Subordinated Promissory Notes" for further discussion of the terms of these notes as well as the notes to our financial statements included elsewhere in this prospectus for a discussion of the accounting treatment of the October 2011 and November 2011 transactions.

        Currently, we intend to retain future earnings, if any, to finance the expansion of our business and do not expect to pay any cash dividends in the foreseeable future. Any future determination to pay cash dividends will depend on the discretion of our shareholders at their general meeting, or, with respect to interim dividends, of our Board, and will also depend on, among other things, our financial condition, results of operations, capital requirements, general business conditions, and any contractual restrictions and other factors that our shareholders or Board may deem relevant.

        Under Luxembourg law, at least 5% of our net profits per year must be allocated to the creation of a legal reserve until such reserve has reached an amount equal to 10% of our issued share capital. If the legal reserve subsequently falls below the 10% threshold, at least 5% of net profits again must be allocated toward the reserve. The legal reserve is not available for distribution.

        The registrant is a holding company and has no material assets other than its ownership of shares in TV GFI and its direct and indirect ownership of our operating subsidiaries. TV GFI is a holding entity with no material assets other than its direct and indirect ownership of shares in our operating subsidiaries in both the U.S. and other countries. If we were to distribute a dividend at some point in the future, we would cause the operating subsidiaries to make distributions to TV GFI, which in turn would make distributions to the registrant in an amount sufficient to cover any such dividends.

        We are subject to certain restrictions on our ability to declare or pay dividends. For example, our senior secured credit facility prohibits the registrant and certain of our subsidiaries from paying dividends or making other restricted payments unless such payments are made in accordance with the terms of our senior secured credit facility.

        If we decide to declare dividends in the future, we must do so either in euros or in-kind. If we declare dividends in euros, the amount of dollars realized by shareholders will vary depending on the rate of exchange between dollars and euros. To the extent we pay dividends in euros, shareholders will bear any costs related to the conversion of euros into dollars or any other currency.

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CAPITALIZATION

        The following table sets forth our cash and capitalization as of December 31, 2011:

    on an actual basis; and

    on an as adjusted basis to reflect our issuance and sale of                     common shares in this offering at an assumed initial public offering price of $                     per share (the midpoint of the estimated price range set forth on the cover page of this prospectus), after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

        You should read this table in conjunction with the discussion under the heading "Operating and Financial Review and Prospects" and our financial statements and related notes included in this prospectus.

        The unaudited as adjusted consolidated financial data is presented for informational purposes only and does not purport to represent what our financial position actually would have been had the transactions reflected occurred on the date indicated or our financial position as of any future date.

 
  As of December 31, 2011  
 
  Actual   As adjusted  
 
   
  (unaudited)
 
 
  (in thousands)
 

Cash at bank and in hand(1)

  $ 16,254   $    
           

Interest-bearing loans and borrowings, short-term

    19,489        

Interest-bearing loans and borrowings, long-term

    194,480        
           

Total borrowings

    213,969        

Issued capital

   
1,549
       

Additional paid-in capital

    500,446        

Accumulated losses

    (584,982 )      

Foreign currency translation reserve

    5,908        
             

Total equity

    (77,079 )      
           

Total capitalization

  $ 136,890   $    
           

(1)
A $1.00 increase (decrease) in the assumed offering price of $        per share (the midpoint of the estimated price range set forth on the cover of this prospectus) would increase (decrease) our cash at bank and in hand by $        and our total capitalization by $        , assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

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DILUTION

        If you invest in our common shares, your ownership interest will be diluted to the extent of the difference between the public offering price per common share and the as adjusted net tangible book value per common share immediately after this offering. Our net tangible book value deficit as of December 31, 2011 was $366.6 million, or $3.32 per common share, based on 110,578,806 common shares outstanding as of December 31, 2011. Net tangible book value per common share is determined by dividing our total tangible assets less total liabilities by the number of common shares outstanding, before giving effect to our sale of common shares in this offering.

        After giving effect to our sale of                     common shares in this offering at an assumed initial public offering price of $                    (the midpoint of the estimated price range set forth on the cover of this prospectus), less the estimated underwriting discounts and commissions and estimated offering expenses payable by us, our as adjusted net tangible book value as of December 31, 2011 would have been $             million, or $             per common share. This amount represents an immediate increase in net tangible book value of $             per share to existing shareholders and an immediate dilution in net tangible book value of $             per common share to new investors. Dilution per common share represents the difference between the amount per common share paid by purchasers of our common shares in this offering and the net tangible book value per common share immediately afterwards, after giving effect to the sale of                     common shares in this offering at an assumed initial public offering price of $                    (the midpoint of the estimated price range set forth on the cover of this prospectus) per common share and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

        The following table illustrates this per share dilution (in thousands):

Assumed initial public offering price per share

        $    

Net tangible book value per share as of December 31, 2011, before this offering

  $ (366,589 )      
             

As adjusted net tangible book value per share after this offering

        $    
             

Dilution per share to new investors

        $    
             

        A $1.00 increase (decrease) in the assumed initial public offering price of $                    (the midpoint of the estimated price range set forth on the cover of this prospectus) would increase (decrease) the as adjusted net tangible book value by $             million, the net tangible book value per share after this offering, by $             per share and the dilution in as adjusted net tangible book value per share to investors in this offering by $             per share, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

        The preceding discussion and table assume no exercise of outstanding share options as of December 31, 2011. As of December 31, 2011, we had outstanding options to purchase a total of 10,794,579 of our common shares at a weighted average exercise price of $4.71 per share. To the extent that any of these options are exercised, there will be further dilution to new investors.

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SELECTED CONSOLIDATED FINANCIAL DATA

        The following tables set forth our selected consolidated financial and other data. You should read the following selected consolidated financial and other data together with our consolidated financial statements and related notes as well as "Operating and Financial Review and Prospects" and the other financial information included elsewhere in this prospectus.

        We derived the consolidated statement of operations data and the consolidated statement of comprehensive income data for the years ended December 31, 2009, 2010 and 2011 and consolidated balance sheet data as of December 31, 2010 and 2011 from our audited consolidated financial statements appearing elsewhere in this prospectus. We derived the consolidated statement of operations data and the consolidated statement of comprehensive income data for the year ended December 31, 2008 and the consolidated balance sheet data as of December 31, 2009 from our consolidated financial statements not included in this prospectus. We derived the consolidated balance sheet data as of December 31, 2008 from our unaudited financial statements. For periods prior to July 29, 2009, the date on which the registrant and GFI Acquisition came under common control, our consolidated financial statements present the consolidated results and changes in equity solely of GFI Acquisition and its subsidiaries. See "Special Note Regarding Our Corporate History and the Presentation of Our Financial Information."

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        Our financial statements have been prepared in accordance with IFRS as adopted by the International Accounting Standards Board. Historical results are not indicative of the results to be expected in the future.

 
  Year ended December 31,  
 
  2008   2009   2010   2011  
 
  (in thousands, except share and per share data)
 

Consolidated Statement of Operations Data:

                         

Revenue

  $ 51,453   $ 50,136   $ 81,725   $ 120,077  

Cost of sales(1)

    8,016     8,955     19,059     23,919  
                   

Gross profit

    43,437     41,181     62,666     96,158  

Operating costs:

                         

Research and development(1)

    4,142     6,495     14,114     24,885  

Sales and marketing(1)

    13,341     16,369     31,132     52,916  

General and administrative(1)

    6,541     7,474     16,755     37,757  

Depreciation, amortization and impairment

    4,950     10,317     18,629     22,475  
                   

Total operating costs

    28,974     40,655     80,630     138,033  
                   

Operating (loss) / profit

    14,463     526     (17,964 )   (41,875 )

Finance costs, net

    (10,138 )   (13,618 )   (16,480 )   (10,119 )

Other income / (costs), net

    (991 )   446     (1,328 )   (3,267 )
                   

(Loss) / profit before taxation

    3,334     (12,646 )   (35,772 )   (55,261 )

Tax benefit / (expense)

    (1,213 )   3,320     7,493     3,325  
                   

(Loss) / profit for the year

  $ 2,121   $ (9,326 ) $ (28,279 ) $ (51,936 )
                   

Total (loss) / profit attributable to owners of GFI Software S.à r.l. 

  $ 2,121   $ (5,562 ) $ (21,878 ) $ (51,936 )
                   

Comprehensive (loss) / profit

  $ 1,464   $ (9,499 ) $ (32,385 ) $ (41,882 )
                   

Comprehensive (loss) / profit attributable to owners of GFI Software S.à r.l. 

  $ 1,464   $ (6,005 ) $ (25,984 ) $ (41,882 )
                   

Basic and diluted profit / (loss) per:

                         

Class A common share

  $ 0.17   $ (0.31 ) $ (0.56 ) $ (12.08 )
                   

Class B preferred participating share(2)

  $   $ (0.31 ) $ (0.42 ) $ (0.48 )
                   

Weighted average shares outstanding

                         

Class A common shares

    12,734,994     17,958,490     29,872,486     44,201,227  

Class B preferred participating shares(2)

        77,875     12,658,701     66,377,579  

Supplemental Financial Metrics

                         

Billings(3)

  $ 50,641   $ 71,470   $ 143,526   $ 200,240  

Unlevered Free Cash Flow (unaudited)(3)

    20,963     17,201     52,887     54,613  

Adjusted EBITDA(3)

    19,895     33,902     66,448     74,895  

(1)
Includes share-based compensation expense, as follows:

Cost of sales

  $ (7 ) $ 25   $ 34   $ 321  

Research and development

    20     55     63     1,153  

Sales and marketing

    18     148     453     2,076  

General and administrative

    (34 )   281     442     6,688  
                   

  $ (3 ) $ 509   $ 992   $ 10,238  
                   
(2)
See "Description of Share Capital—Historical Development of the Share Capital of the Registrant" for a description of the issuance (including the terms thereof) and subsequent elimination of the class B preferred participating shares.

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(3)
See "Supplemental Information" below for how we define and calculate Billings, Unlevered Free Cash Flow and Adjusted EBITDA, and a reconciliation of these non-IFRS financial measures to the most directly comparable IFRS measures, and a discussion about the limitations of these non-IFRS financial measures.

        The following table presents our summary consolidated balance sheet data as of each date indicated:

 
  As of December 31,  
 
  2008   2009   2010   2011  
 
  (unaudited)
   
   
   
 
 
  (in thousands, except share data)
 

Consolidated Balance Sheet Data:

                         

Cash at bank and in hand

  $ 6,292   $ 9,067   $ 22,719   $ 16,524  

Total assets

    114,012     315,499     367,995     369,408  

Working capital(1)

    (104,718 )   (48,906 )   (103,813 )   (92,941 )

Deferred revenue, including long-term portion

    17,924     43,418     117,738     190,154  

Interest-bearing loans and borrowings

    99,068     201,151     87,312     213,969  

Total liabilities

    123,072     279,046     239,494     446,487  

Issued capital

    18,083     40,319     154,932     1,549  

Total equity

    (9,060 )   36,453     128,501     (77,079 )

Shares outstanding:

                         

Class A common shares

    1,290,654,199     2,859,790,850     3,317,364,167     110,578,806  

Class B preferred participating shares(2)

        17,828,100     7,740,516,390      

(1)
Includes current portion of deferred revenue of $15,421, $25,629, $51,281 and $78,777 as of December 31, 2008, 2009, 2010 and 2011, respectively.

(2)
See "Description of Share Capital—Historical Development of the Share Capital of the Registrant" for a description of the issuance (including the terms thereof) and subsequent elimination of the class B preferred participating shares.

Supplemental Information

    Billings

        Billings is a non-IFRS financial measure which we calculate by adding revenue recognized during the applicable period to the change in deferred revenue between the start and end of the same period, as presented in our consolidated statement of cash flows. We consider Billings to be a leading indicator of future revenue and operational growth based on our business model of billing total arrangement fees at the time of sale, and we use Billings to evaluate the operating performance of our operating segments. Our use of Billings as a non-IFRS measure has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for revenue or an analysis of our results as reported under IFRS. Some of these limitations are:

    Billings does not predict revenue for a specific future period. Trends in Billings are not directly correlated to trends in revenue except when measured over longer periods; and

    Other companies, including companies in our industry, may not use Billings, may calculate Billings differently, or may use other financial measures to evaluate their performance—all of which reduce the usefulness of Billings as a comparative measure.

        A significant portion of our Billings relates to solutions for which the corresponding revenue is deferred and subsequently recognized over time. In particular, Billings for maintenance, subscriptions and

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web-based services are typically invoiced in advance of ratable revenue recognition, which typically ranges over periods of up to 48 months.

        The following table reconciles revenue, the most directly comparable IFRS measure, to Billings for the periods presented:

 
  As of December 31,  
 
  2008   2009   2010   2011  
 
  (in thousands)
 

Reconciliation of revenue to Billings:

                         

Revenue

  $ 51,453   $ 50,136   $ 81,725   $ 120,077  

Change in deferred revenue

    (812 )   21,334     61,801     80,163  
                   

Billings

  $ 50,641   $ 71,470   $ 143,526   $ 200,240  
                   

    Unlevered Free Cash Flow

        Unlevered Free Cash Flow is a non-IFRS financial measure that we define as net cash flows from operating activities less capital expenditures, net of proceeds from the sales of property and equipment. Our management uses this measure when evaluating the operating performance of our consolidated business. We believe Unlevered Free Cash Flow provides management and investors with a more complete understanding of the underlying liquidity of our core operating business and our ability to meet our current and future financing and investing needs. While we believe that this non-IFRS financial measure is useful in evaluating our business, this information should be considered as supplemental in nature and is not meant as a substitute for net cash flows from operating activities presented in accordance with IFRS.

        The following table presents a reconciliation of net cash flows from operating activities, the most comparable IFRS financial measure, to Unlevered Free Cash Flow for each of the periods indicated:

 
  For the Year Ended December 31,  
 
  2008   2009   2010   2011  
 
  (in thousands)
 
Reconciliation of net cash flows from operating activities to Unlevered Free Cash Flow:                          
Net cash flows from operating activities   $ 21,960   $ 18,069   $ 55,007   $ 59,939  
Capital expenditures, net of proceeds from sales of property and equipment     (997 )   (868 )   (2,120 )   (5,326 )
                   

Unlevered Free Cash Flow

  $ 20,963   $ 17,201   $ 52,887   $ 54,613  
                   

    Adjusted EBITDA

        Adjusted EBITDA is a non-IFRS financial measure that we calculate as profit (loss) for the year, adjusted for tax benefit (expense), unrealized exchange fluctuations, finance costs, finance revenue, gain (loss) on disposals, depreciation, amortization and impairment, share-based compensation, specific extraordinary, non-recurring items, plus the change in deferred revenue between the start and end of the period as presented in our consolidated statement of cash flows. We believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board, and we use Adjusted EBITDA to evaluate the operating performance of our operating segments. In addition, our lenders under our senior secured credit facility utilize consolidated EBITDA (as defined in our senior secured credit facility), which we believe to be the same as to Adjusted EBITDA, as a key measure of our financial performance in relation to certain of our operating covenants under our senior secured credit facility. See "Operating and Financial Review and Prospects—Liquidity and Capital Resources—Indebtedness—2011 Senior Secured Credit Facility" for

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a further discussion of the use of consolidated EBITDA in our senior secured credit facility. Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under IFRS.

        The following table presents a reconciliation of (loss) profit, the most comparable IFRS financial measure, to Adjusted EBITDA for each of the periods indicated:

 
  For the Year Ended December 31,  
 
  2008   2009   2010   2011  
 
  (in thousands)
 

Reconciliation of (loss) profit to Adjusted EBITDA:

                         

(Loss) / profit for the year

  $ 2,121   $ (9,326 ) $ (28,279 ) $ (51,936 )
                   

Tax benefit (expense)

    1,213     (3,320 )   (7,493 )   (3,325 )

Finance costs

    10,294     13,659     16,576     10,203  

Finance revenue

    (156 )   (41 )   (96 )   (84 )

Depreciation, amortization and impairment

    6,247     11,533     21,619     26,369  
                   

EBITDA

    19,719     12,505     2,327     (18,773 )
                   

Reconciling items:

                         

Change in deferred revenue

    (812 )   21,334     61,801     80,163  

Share-based compensation

    (3 )   509     992     10,238  

Unrealized exchange fluctuations

    103     (446 )   2,993     3,362  

Gain / (loss) on disposals

    888         (1,665 )   (95 )
                   

Adjusted EBITDA

  $ 19,895   $ 33,902   $ 66,448   $ 74,895  
                   

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OPERATING AND FINANCIAL REVIEW AND PROSPECTS

        The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our "Selected Consolidated Financial Data" and our consolidated financial statements and related notes appearing elsewhere in this prospectus. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors. We discuss factors that we believe could cause or contribute to these differences below and elsewhere in this prospectus, including those set forth under "Risk Factors" and "Forward-Looking Statements and Industry Data."

Overview

        We are a global provider of collaboration, IT infrastructure and managed service provider software solutions that are designed for SMBs. Our solutions enable SMBs to easily manage, secure and access their IT infrastructure and business applications.

        Throughout our history, we have focused on the SMB market by developing and acquiring solutions that address the most prevalent pain points faced by SMBs. Since our inception in 1999, we have observed a growing paradigm shift in the preferences of SMBs. In particular, we observed that SMBs have increasingly preferred to purchase easy-to-use, lower-cost products that solve a particular problem and that can be conveniently downloaded from the Internet or purchased from local resellers rather than the large, expensive IT infrastructure product suites offered by many enterprise software vendors through direct-sales organizations. As a result, we have developed a business model that capitalizes on these trends in SMB purchasing behavior and enables us to cost-effectively sell our solutions to SMBs on a global basis. To accelerate the adoption of our solutions and allow our customers to quickly address their IT challenges, our business model simplifies the process for SMBs to discover, evaluate, procure and deploy our solutions.

        We operate a scalable, data-driven online marketing model targeted at the end-users of our solutions, using focused marketing campaigns to drive prospective customers to our websites and to our partners. We leverage blogs, social media and custom content sites to create online communities that enable our existing and prospective customers to connect directly and share information. We have a try-before-you-buy sales approach in which we offer downloadable, full-featured, free versions of most of our products for a designated trial period to enable our customers to understand the benefits of our solutions prior to making a purchase. We believe that increasing the number of downloads and user trials of our products has proven to be one of the best ways to generate new sales. Therefore, our marketing efforts focus on driving traffic to our websites through online marketing. We believe we have acquired a significant competitive advantage through our use of data analytics, lead nurturing and customer data mining. From our inception, we have focused on better understanding customer needs, usage patterns and buying habits, so that we can effectively align our marketing offerings. Our understanding of the effectiveness and reach of our marketing and sales expenditures enables us to optimize our marketing mix and generate predictable returns on those expenditures over time.

        We have a diversified Internet-based distribution model that consists of direct sales from our websites, our inside sales force and an indirect partner network of over 25,000 channel partners acting as resellers worldwide. Our distribution model allows us to maximize our global reach and has resulted in a high volume of transactions with SMB customers, while reducing our sales and marketing expense. Our customer base has grown from over 89,000 business customers as of December 31, 2008 to over 244,000 business customers in over 180 countries as of December 31, 2011. In addition to continuing to attract new customers, we believe we have a significant opportunity to market and cross-sell complementary solutions to our global customer base, and we have recently increased our expenditures to generate additional revenue from existing SMB customers.

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        Our sales and marketing strategy is geared toward generating a high volume of low-price transactions. Our low up-front average selling price generally averages between $200 and $1,200, and decreases procurement risk and reduces the length of our sales cycle. Our solutions can be downloaded and implemented in a self-service manner and are designed so that they do not require professional services, which accelerates time-to-value and reduces total cost of ownership for our customers. We primarily earn revenue from our customers by offering recurring subscription agreements, connectivity services in connection with our TeamViewer product, and license arrangements that generally include optionally renewable maintenance contracts. In 2011, our revenue was comprised of 78% web-based services, maintenance and subscription revenue and 22% license revenue.

    Corporate History and Structure

        Our corporate existence began in 1999 when GFI Software LTD was formed as Avonside Technology Corporation, an international business company incorporated in the British Virgin Islands with operations in Malta. In May 2005, GFI Software LTD was indirectly acquired by GFI Acquisition, an entity controlled by certain investment funds affiliated with Insight, our majority shareholder. In the years that followed our acquisition by Insight, we have grown through both organic growth and targeted acquisitions of assets and businesses throughout the world. In July 2009, certain other investment funds affiliated with Insight indirectly acquired control of the registrant and, through a series of transactions, the registrant became the parent holding company of TeamViewer GmbH and its affiliates. See "Special Note Regarding Our Corporate History and the Presentation of Our Financial Information" above for a discussion of the impact of Insight's 2009 acquisition of the registrant on the presentation of our consolidated financial statements. In November 2010, GFI Acquisition was merged with and into the registrant, a transaction which we refer to as the Merger. The Merger resulted in our present corporate structure.

        The following is a description of our key subsidiaries through which we operate our business:

        GFI Software LTD.    Our original operating company, GFI Software LTD, and certain of its direct and indirect subsidiaries have developed a broad collection of IT management solutions focused on the needs of SMBs, including: web filtering, systems monitoring, server and asset management, endpoint device control, log management and fax. We generally market our IT management solutions under the "GFI" brand.

        GFI MAX Limited.    GFI MAX Limited was formed in 2003 as HoundDog Technology Limited, or "HoundDog," and offers a suite of solutions to MSPs to monitor, maintain, repair and administer the IT infrastructure that they have been hired to manage. We acquired HoundDog in July 2009 and generally market our MSP offerings under the "GFI MAX" or "MAX" brand.

        GFI Software (Florida) Inc.    GFI Software (Florida) Inc. was formed in 1994 as Sunbelt Software Distribution, Inc., or "Sunbelt," and offers antivirus and email security solutions to help our customers protect their IT infrastructure from security threats and spam. We acquired Sunbelt in June 2010 and generally market our IT infrastructure security solutions under the "VIPRE" brand.

        TeamViewer GmbH.    TeamViewer GmbH began its operations in 2006 with a focus on controlling computers remotely and, under our ownership, was expanded to offer additional collaboration solutions, including web conferencing and remote presentation capabilities. As discussed above, in July 2009 funds affiliated with Insight acquired control of the registrant, which became the parent holding company of TeamViewer GmbH and its affiliates, and the subsequent Merger resulted in the consolidation of the two previously independent businesses under one organizational structure. We generally market our collaboration software solutions under the "TeamViewer" brand.

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        Certain of our other, smaller operating subsidiaries acquired through acquisitions include:

        Techgenix Limited.    In March 2008, we acquired Techgenix Limited to build a closer relationship with the IT professionals we serve. Techgenix Limited provides IT thought leadership and technical content in the form of newsletters and websites to millions of IT professionals every month.

        Internet Integration, Inc.    In September 2009, we acquired Internet Integration, Inc. (which conducts business under the name Katharion). Katharion offers a hosted email filtering service that we have incorporated into our GFI MAX brand solutions.

        Monitis, Inc.    In September 2011, we acquired Monitis, Inc. and its sister company, Monitis GFI CJSC, which we collectively refer to as "Monitis." Monitis offers an integrated suite of web application and cloud services monitoring tools that are delivered as an easy-to-use, easy-to-deploy SaaS solution for SMBs.

        Certain of the acquisitions described above have had a material impact on our results of operations for the periods discussed below or may have a material impact on our results of operations for future periods. In response to emerging technology and market trends that impact our customers, we will continue to seek to expand our range of software solutions through internal development, partnerships with other technology providers and potential strategic acquisitions.

    Operating Segments

        Prior to January 2012, the company was organized into one operating segment. In the first quarter of 2012, we changed our internal organizational reporting structure and identified three reportable operating segments as follows:

Operating Segment
  Description
Collaboration   Offers collaboration solutions through TeamViewer, our remote collaboration product, which provides multi-user web conferencing, desktop and file sharing, and secure remote control and access to virtually any Internet-enabled device.

IT Infrastructure

 

Offers solutions that enable SMBs to manage, secure and access their IT resources, such as servers and workstations.

GFI MAX

 

Provides SaaS solutions designed specifically for providers of outsourced IT support services, including the ability to configure, monitor, manage and secure their customers' IT infrastructure through the cloud.

        Each of our operating segments offers different services and technology and is managed separately pursuant to developed marketing strategies. Our Collaboration operating segment derives revenue from developing, selling and supporting computer software for collaboration and remote access over the Internet, primarily through our TeamViewer product. Sales of our TeamViewer product are bundled with the right to connectivity services and support and, accordingly, revenue are reported within web-based services, maintenance and subscription revenue in our consolidated income statement. The IT Infrastructure operating segment generally derives its revenue from computer software which is produced and licensed for web and email filtering, archiving, back-up, fax, antivirus and network security solutions. It also offers maintenance and support in these areas. IT Infrastructure revenue is reported within both revenue lines in our consolidated income statement. Our GFI MAX operating segment generates revenue from licensing a hosted SaaS platform to third parties to enable remote IT management, monitoring and security. Our GFI MAX product is sold on a subscription basis and billed monthly in arrears and, accordingly, revenue is reported within web-based services, maintenance and subscription revenue in our consolidated income statement.

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Key Supplemental Financial Metrics

        We regularly review a number of metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections, establish budgets and make strategic decisions. We consider the following key financial metrics to be important measures of the performance of our business:

    Billings

        Billings is a non-IFRS financial measure which we calculate by adding revenue recognized during the applicable period to the change in deferred revenue between the start and end of the same period, as presented in our consolidated statement of cash flows. We consider Billings to be a leading indicator of future revenue and cash inflows based on our business model of billing total arrangement fees at the time of sale, and we use Billings to evaluate the operating performance of our operating segments. Our use of Billings as a non-IFRS measure has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for revenue or an analysis of our results as reported under IFRS. Some of these limitations are:

    Billings is not a substitute for revenue and does not predict revenue for a specific future period. Trends in Billings are not directly correlated to trends in revenue except when measured over longer periods of time; and

    Other companies, including companies in our industry, may not use Billings, may calculate Billings differently, or may use other financial measures to evaluate their performance—all of which reduce the usefulness of Billings as a comparative measure.

        A significant portion of our Billings relates to products and services for which the related revenue is deferred and subsequently recognized over time. In particular, Billings for maintenance, sales of our TeamViewer product, and license subscriptions are typically invoiced in advance of ratable revenue recognition, which typically ranges over periods of up to 48 months.

        Billings increased by $20.8 million, or 41%, from $50.6 million in 2008 to $71.5 million in 2009, by $72.0 million, or 101%, to $143.5 million in 2010, and by $56.7 million, or 40%, to $200.2 million in 2011. The increase in Billings in these years was primarily driven by acquisitions, new customers and increased up-sell of our products to existing customers.

        We provide a reconciliation of Billings to the most comparable IFRS metric, revenue, under "Selected Consolidated Financial Data—Supplemental Information."

    Unlevered Free Cash Flow

        Unlevered Free Cash Flow is a non-IFRS financial measure that we define as net cash flows from operating activities less capital expenditures, net of proceeds from the sales of property and equipment. We use this measure when evaluating the operating performance of our consolidated business. We believe Unlevered Free Cash Flow provides management and investors with a more complete understanding of the underlying liquidity of our core operating business and our ability to meet our current and future financing and investing needs. While we believe that this non-IFRS financial measure is useful in evaluating our business, this information should be considered as supplemental in nature and is not meant as a substitute for net cash flows from operating activities presented in accordance with IFRS.

        Unlevered Free Cash Flow decreased by $3.8 million, or 18%, from $21.0 million in 2008 to $17.2 million in 2009, increased by $35.7 million, or 207%, to $52.9 million in 2010, and increased by $1.7 million, or 3%, to $54.6 million in 2011. The Unlevered Free Cash Flow change in 2010 and 2011 was primarily driven by acquisitions, new customers and increased up-sell of our products to existing customers, although the increase in 2011 was offset by our increased expenditures in infrastructure (to

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support the growth in our business and our ability to meet the requirements of being a public company), marketing and product development. Our Unlevered Free Cash Flow change from 2008 to 2009 resulted primarily from our year-over-year operating loss and increased tax payments.

        We provide a reconciliation of Unlevered Free Cash Flow to the most comparable IFRS metric, net cash flows from operating activities, under "Selected Consolidated Financial Data—Supplemental Information."

    Adjusted EBITDA

        Adjusted EBITDA is a non-IFRS financial measure that we calculate as profit (loss) for the year, adjusted for tax benefit (expense), other non-operating expenses, finance costs, finance revenue, gain (loss) on disposals, depreciation, amortization, share-based compensation, specific extraordinary, non-recurring items, plus the change in deferred revenue between the start and end of the period as presented in our consolidated statement of cash flows. We believe that Adjusted EBITDA provides useful information to investors and analysts in understanding and evaluating our operating results in the same manner as our management and Board, and we use Adjusted EBITDA to evaluate the operating performance of our operating segments. In addition, our lenders under our senior secured credit facility utilize consolidated EBITDA (as defined in our senior secured credit facility), which we believe to be the same as Adjusted EBITDA, as a key measure of our financial performance in relation to certain of our operating covenants under our senior secured credit facility. See "Operating and Financial Review and Prospects—Liquidity and Capital Resources—Indebtedness—2011 Senior Secured Credit Facility" for a further discussion of the use of consolidated EBITDA in our senior secured credit facility. Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under IFRS.

        Adjusted EBITDA increased by $14.0 million, or 70%, from $19.9 million in 2008 to $33.9 million in 2009, by $32.5 million, or 96%, to $66.4 million in 2010, and by $8.4 million, or 13%, to $74.9 million in 2011. The increase in Adjusted EBITDA in 2010 and 2011 was primarily driven by the increase in Billings due to acquisitions, new customers and increased up-sell of our products to existing customers, although this increase in 2011 was partially offset by our increased expenditures in infrastructure (to support the growth in our business and our ability to meet the requirements of being a public company), marketing and product development.

        We provide a reconciliation of Adjusted EBITDA to the most comparable IFRS metric, loss (profit), under "Selected Consolidated Financial Data—Supplemental Information."

Financial Operations Overview

    Revenue

        Web-based Services, Maintenance and Subscription Revenue.    Web-based services, maintenance and subscription revenue represents fees earned from connectivity services (which is the remote server hosting function we provide in connection with our TeamViewer product), maintenance services, our SaaS offerings and software licenses which do not qualify for separation from bundled services, net of returns, applicable discounts and taxes collected from customers and remitted to government authorities. Web-based services, maintenance and subscription revenue does not include revenue from professional services as we do not provide professional services to our customers. TeamViewer software licenses are bundled with connectivity services and support for an unspecified period, revenue for these services is recognized ratably on a daily basis over the estimated technological software life, which is estimated to be 48 months. Updates to TeamViewer are typically released annually and are offered to customers for an incremental fee. License arrangements for some of our products include optionally renewable maintenance agreements for which the related revenue is recognized ratably on a daily basis over the maintenance period. SaaS revenue is comprised of subscription, activation and branding fees from

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customers who access our hosted software and service offerings. Any related Billings in advance of a subscription period are deferred and recognized ratably on a daily basis over the subscription term. Usage is primarily billed monthly and recognized as the service is provided. Activation fees are recognized ratably over the period during which a customer's servers or workstations interact with our hosted software, which is estimated to be 12 months. Branding fees are recognized ratably over the estimated customer relationship, or 60 months. We expect web-based services, maintenance and subscription revenue to increase as a percentage of total revenue due to the expected growth of our Collaboration operating segment, as well as growth in our GFI MAX operating segment, as more customers choose to purchase SaaS products.

        License Revenue.    License revenue is comprised primarily of perpetual software license fees and, to a lesser extent, fees generated by sales of certain third party hardware. We recognize revenue from perpetual licenses when the significant risks and rewards of ownership have passed to the buyer as evidenced by delivery, which typically occurs by electronic transfer of the license key for use of the software, assuming all other revenue recognition criteria have been met. We anticipate that license revenue will decrease as a percentage of total revenue primarily due to more customers purchasing web-based services in the future.

    Cost of Sales

        Cost of Web-based Services, Maintenance and Subscription.    Cost of web-based services, maintenance and subscription sales primarily consists of personnel costs related to providing technical support services, royalties, third-party contractor expenses, facilities costs attributable to our technical support personnel, data center charges and merchant fees. Personnel costs include salaries, employee benefit costs, bonuses, share-based compensation and direct overhead. We allocate share-based compensation expense to personnel costs within cost of sales. We expect cost of sales relative to revenue, and thus gross margins from web-based services, maintenance and subscription, to remain consistent in future years.

        Cost of Licenses.    Cost of license sales primarily consists of royalties, hardware, third-party software costs and merchant fees. In the long term, gross margins from license sales could fluctuate significantly depending on the competitive marketplace and the product mix.

        Amortization of Acquired Software and Patents.    Amortization of acquired software and patents relates to intangible assets acquired in connection with the acquisitions of HoundDog, TeamViewer GmbH and Katharion in 2009, Sunbelt in 2010 and Monitis in 2011. The acquired software and patents are amortized over the period in which we expect to realize the benefit. Software acquired in connection with these transactions is being amortized over estimated lives ranging from three to eight years. Patents and licenses acquired in connection with these transactions are being amortized over their estimated useful lives of three to five years.

    Operating Expenses

        We classify our operating expenses into four categories: research and development, sales and marketing, general and administrative, and depreciation, amortization and impairment.

        Research and Development.    Research and development expenses primarily consist of personnel and facility costs for our research and development employees, as well as third-party contractor costs and consulting fees. We have devoted our development efforts primarily to enhancing functionality and expanding and maintaining the capabilities of our software solutions. We expect to expand our research and development operations in 2012 by hiring additional personnel.

        Sales and Marketing.    Sales and marketing expenses primarily consist of personnel costs for our sales and marketing employees, the cost of marketing programs, commissions earned by our sales personnel and facilities costs attributable to our sales and marketing personnel. We expect to continue to hire additional sales and marketing personnel and increase our investment in marketing programs in 2012.

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        General and Administrative.    General and administrative expenses primarily consist of personnel costs for our executive, finance, legal, human resources and administrative personnel, as well as the cost of facilities, legal, accounting and other professional service fees, acquisition-related expenses, realized currency gains and losses and other corporate expenses. We expect to continue to incur higher costs associated with being a public company, including increased personnel costs from additional hires, legal, corporate insurance and accounting expenses, and the additional costs of achieving and maintaining compliance with Section 404 of the Sarbanes-Oxley Act and related regulation.

        Depreciation, Amortization and Impairment.    Depreciation consists primarily of depreciation expense on computer equipment, computer software and office equipment. Amortization is primarily amortization expense on intangible assets from acquisitions. If we acquire other businesses which result in our owning additional intangible assets, the amortization of any acquired intangible assets could cause our amortization expense to increase as a percentage of net revenue. Impairment of goodwill and other intangible assets is recognized when we determine that the carrying value of goodwill and indefinite-lived intangible assets is greater than the fair value. We assess the carrying value of goodwill and other indefinite-lived intangibles at least annually, and more frequently when circumstances indicate that the carrying value may be impaired. If future circumstances change and the fair value of goodwill or intangible assets is less than the current carrying value, additional impairment charges will be recognized.

    Non-Operating Expenses and Income

        Non-operating expenses and income primarily consist of finance costs, finance revenue, unrealized exchange fluctuations and gain on disposal of product lines. Finance costs primarily consist of interest expense associated with our outstanding debt. Finance revenue is interest income received on our cash and cash equivalents. Monetary assets and liabilities that are denominated in foreign currencies are remeasured at the period-end closing rate with resulting unrealized exchange fluctuation.

        From time to time we have elected to dispose of existing product lines that we considered to be inconsistent with our core business strategy. A gain is recorded when we determine that the proceeds from the sale exceed the carrying value of the disposed assets, and a loss is recorded when the carrying value of the disposed assets exceeds the proceeds from the sale.

    Income Tax Expense

        Income tax expense consists of the current taxes we pay in several countries on our taxable income, as well as deferred tax with respect to differences in the timing between the reporting of income and expense for financial purposes and taxable income. The timing differences largely relate to deferred revenue, intangible assets and unabsorbed tax losses. For a further breakdown of our income tax components, see the income tax footnote in our consolidated financial statements included elsewhere in this prospectus.

        We determine our income tax expense for financial reporting purposes under IAS 12 Income Taxes. Differences exist between the computation of income tax expense for financial reporting purposes and the income tax payable to the various tax authorities. These differences are a result of differences in the computations of income and expense under the tax laws in the various jurisdictions in which we operate and the amounts calculated for financial reporting purposes. These differences may result in a material difference in the income tax expense recorded and the amount of cash taxes paid in the future.

    Impact of Foreign Currency Translation

        Although our reporting currency is the dollar, our functional currency is the euro; accordingly, a significant portion of our business is conducted in currencies other than the dollar. While our operating subsidiaries usually conduct their business in their respective functional currencies and thus incur expenses payable in the same currencies in which they generate revenue, our risk of exchange rate fluctuations from ongoing ordinary operations is potentially significant because a significant portion of our corporate

59


expenses are in dollars rather than euros and certain of our subsidiaries incur expenses independently of their generation of revenue. We do not engage in any formal hedging activities.

        Fluctuations in the value of the currencies in which we do business relative to the dollar may have a material adverse effect on our business, results of operations and financial condition. The depreciation of such other currencies in relation to the dollar decreases the reported dollar value of our assets and liabilities denominated in such other currencies and decreases the dollar value of revenue and expenses denominated in such other currencies. Conversely, the appreciation of any currency in relation to the dollar has the effect of increasing the dollar value of our assets and liabilities and increasing the dollar value of revenue and expenses denominated in other currencies. We expect that our exposure to foreign currency exchange risk will increase as we continue to expand our business internationally, particularly our Collaboration operating segment, in which our Billings are predominantly generated in euros.

        Based on the functional currency of our subsidiaries, approximately $66.2 million, or 55%, of our total revenue and $72.5 million, or 45%, of our cost of sales and operating expenses in 2011 were accounted for and recorded in currencies other than the dollar, primarily the euro and the pound sterling. As a result, the associated revenue and expenses had to be translated into dollars for financial reporting purposes.

        The following table demonstrates the sensitivity to a 5% change in the euro to dollar exchange rate and pound sterling to dollar exchange rate, with all other variables held constant for 2011:

 
   
  2011  
 
  Increase / Decrease
in Exchange Rate
  Revenue   Cost of Sales   Operating Expenses  
 
   
  (in thousands)
 

Effect on operating results (euro)

    +5 % $ 2,358     189   $ 2,700  

    -5 %   (2,358 )   (189 )   (2,700 )

Effect on operating results (pound sterling)

   
+5

%

$

949
   
51
 
$

684
 

    -5 %   (949 )   (51 )   (684 )

60


Operating Segments

        The following table presents Billings, revenue and Adjusted EBITDA by operating segment for each of the periods indicated, as if such operating segments were in existence during such periods:

 
  Year ended December 31,  
 
  2009   2010   2011  
 
  (in thousands)
 

Billings

                   

Collaboration

  $ 18,536   $ 60,921   $ 99,575  

IT Infrastructure

    49,980     73,489     86,152  

GFI MAX

    2,954     9,116     14,513  
               

Total Billings

  $ 71,470   $ 143,526   $ 200,240  
               

Revenue

                   

Collaboration

  $ 1,656   $ 11,221   $ 29,975  

IT Infrastructure

    45,837     61,764     76,136  

GFI MAX

    2,643     8,740     13,966  
               

Total revenue:

  $ 50,136   $ 81,725   $ 120,077  
               

Adjusted EBITDA

                   

Collaboration

  $ 15,630   $ 51,265   $ 79,205  

IT Infrastructure

    18,213     21,041     11,031  

GFI MAX

    357     1,398     2,166  

Corporate

    (298 )   (7,256 )   (17,507 )
               

Total Adjusted EBITDA

  $ 33,902   $ 66,448   $ 74,895  
               

Reconciliation of revenue to Billings

                   

Revenue

  $ 50,136   $ 81,725   $ 120,077  

Change in deferred revenue

    21,334     61,801     80,163  
               

Billings

  $ 71,470   $ 143,526   $ 200,240  
               

Reconciliation of Adjusted EBITDA to loss for the year

                   

Segment results:

                   

Adjusted EBITDA

  $ 33,902   $ 66,448   $ 74,895  

Reconciling items:

                   

Change in deferred revenue

    (21,334 )   (61,801 )   (80,163 )

Unallocated group managed items:

                   

Depreciation, amortization and impairment

    (11,533 )   (21,619 )   (26,369 )

Share-based compensation

    (509 )   (992 )   (10,238 )

Unrealized exchange fluctuations

    446     (2,993 )   (3,362 )

Finance cost, net

    (13,618 )   (16,480 )   (10,119 )

Gain on disposal of product lines

        1,665     95  

Tax benefit

    3,320     7,493     3,325  
               

Loss for the year

  $ (9,326 ) $ (28,279 ) $ (51,936 )
               

61


Results of Operations

        The following tables set forth consolidated income statement information for the periods presented and as a percentage of revenue for those periods:

 
  Year ended December 31,  
Consolidated Statement of Operations Data:
  2009   2010   2011  
 
  (in thousands)
 

Revenue

                   

Web-based services, maintenance and subscription

  $ 34,252   $ 63,455   $ 93,960  

Licenses

    15,884     18,270     26,117  
               

Total revenue

    50,136     81,725     120,077  

Cost of sales

                   

Web-based services, maintenance and subscription

    6,836     13,296     14,460  

Licenses

    903     2,773     5,565  

Amortization of acquired software and patents

    1,216     2,990     3,894  
               

Total cost of sales(1)

    8,955     19,059     23,919  

Gross profit

   
41,181
   
62,666
   
96,158
 

Research and development(1)

   
6,495
   
14,114
   
24,885
 

Sales and marketing(1)

    16,369     31,132     52,916  

General and administrative(1)

    7,474     16,755     37,757  

Depreciation, amortization and impairment

    10,317     18,629     22,475  
               

Operating (loss) / profit

    526     (17,964 )   (41,875 )

Gain on disposal of product lines

   
   
1,665
   
95
 

Unrealized exchange fluctuations

    446     (2,993 )   (3,362 )

Finance revenue

    41     96     84  

Finance costs

    (13,659 )   (16,576 )   (10,203 )
               

Loss before taxation

    (12,646 )   (35,772 )   (55,261 )

Tax benefit

   
3,320
   
7,493
   
3,325
 
               

Loss for the year

  $ (9,326 ) $ (28,279 ) $ (51,963 )
               

(1)
Includes share-based compensation expense, as follows:

 

Cost of sales

  $ 25   $ 34   $ 321  
 

Research and development

    55     63     1,153  
 

Sales and marketing

    148     453     2,076  
 

General and administrative

    281     442     6,688  
                 
 

  $ 509   $ 992   $ 10,238  
                 

62



 
  Year ended December 31,  
 
  2009   2010   2011  
 
  (in thousands)
 

Revenue

                   

Web-based services, maintenance and subscription

    68.3 %   77.6 %   78.2 %

Licenses

    31.7 %   22.4 %   21.8 %
               

Total revenue

    100.0 %   100.0 %   100.0 %

Cost of sales

                   

Web-based services, maintenance and subscription

    13.6 %   16.3 %   12.0 %

Licenses

    1.8 %   3.4 %   4.6 %

Amortization of acquired software and patents

    2.4 %   3.7 %   3.2 %
               

Total cost of sales

    17.9 %   23.3 %   19.9 %

Gross profit

   
82.1

%
 
76.7

%
 
80.1

%

Research and development

   
13.0

%
 
17.3

%
 
20.7

%

Sales and marketing

    32.6 %   38.1 %   44.1 %

General and administrative

    14.9 %   20.5 %   31.4 %

Depreciation, amortization and impairment

    20.6 %   22.8 %   18.7 %
               

Operating (loss) / profit

    1.0 %   (22.0 )%   (35.9 )%

Gain on disposal of product lines

   
(0.0

)%
 
2.0

%
 
0.1

%

Unrealized exchange fluctuations

    0.9 %   (3.7 )%   (2.8 )%

Finance revenue

    0.1 %   0.1 %   0.1 %

Finance costs

    (27.2 )%   (20.3 )%   (8.5 )%
               

Loss before taxation

    (25.2 )%   (43.8 )%   (46.0 )%

Tax benefit

    6.6 %   9.2 %   2.8 %
               

Loss for the year

    (18.6 )%   (34.6 )%   (43.3 )%
               

Comparison of the Years Ended December 31, 2011 and 2010

    Revenue

 
  Year ended December 31,    
   
 
 
  2011   2010   Period to Period
Change
 
 
   
  % of
Revenue
   
  % of
Revenue
 
 
  Amount   Amount   Amount   Percentage  
 
  (in thousands, except percentages)
 

Revenue:

                                     

Web-based services, maintenance and subscription

  $ 93,960     78 % $ 63,455     78 % $ 30,505     48 %

Licenses

    26,117     22 %   18,270     22 %   7,847     43 %
                           

Total revenue

  $ 120,077     100 % $ 81,725     100 % $ 38,352     47 %
                           

        Revenue was $120.1 million in 2011 compared to $81.7 million in 2010, an increase of $38.4 million, or 47%. Our existing business (which we define below) generated $25.3 million of this increase in revenue, while sales associated with our Sunbelt subsidiary (including our VIPRE line of products) generated the remaining $13.1 million of the increase in revenue. Additionally, $2.9 million, or 2%, of our total $120.1 million in 2011 revenue was due to the strengthening of the euro and, to a lesser degree, the pound sterling, when compared to the dollar on a constant currency basis.

63


        In 2010 and 2011, our existing business consisted of sales associated with our IT Infrastructure, Collaboration and GFI MAX operating segments, assuming such operating segments had been in existence during such time and exclusive of any sales related to Sunbelt (including sales of our VIPRE line of products). We exclude Sunbelt from the definition of our existing business in 2010 and 2011 for purpose of the year-over-year comparison because we acquired Sunbelt in June 2010.

        $24.3 million of the total $30.5 million increase in web-based services, maintenance and subscription revenue in 2011 compared to 2010 was associated with our existing business, while the remaining $6.2 million increase was associated with services provided by Sunbelt. Our Collaboration operating segment and GFI MAX operating segment, assuming such operating segments had been in existence in 2010 and 2011, accounted for $18.8 million, or 77%, and $5.2 million, or 21%, respectively, of the $24.3 million in growth of web-based services, maintenance and subscription revenue generated by our existing business, while sales of solutions associated with our IT Infrastructure operating segment (exclusive of our VIPRE line of products), assuming such operating segment had been in existence in 2010 and 2011, provided the remaining $0.3 million, or 2%, revenue increase.

        $6.9 million of the $7.8 million increase in our license revenue resulted from our recording a full year of revenue associated with sales of our VIPRE line of products, as well as growth in sales of our VIPRE line of products. The remaining $0.9 million increase in license revenue resulted from sales of solutions associated with our IT Infrastructure operating segment (exclusive of our VIPRE line of products), assuming such operating segment had been in existence in 2010 and 2011.

    Cost of Sales and Gross Profit

 
  Year ended December 31,    
   
 
 
  2011   2010    
   
 
 
  Period to Period Change  
 
   
  % of
Revenue
   
  % of
Revenue
 
 
  Amount   Amount   Amount   Percent  
 
  (in thousands, except percentages)
 

Cost of sales:

                                     

Web-based services, maintenance and subscription

  $ 14,460     12 % $ 13,296     16 % $ 1,164     9 %

License

    5,565     5 %   2,773     3 %   2,792     101 %

Amortization of acquired software and patents

    3,894     3 %   2,990     4 %   904     30 %
                           

Total cost of sales

  $ 23,919     20 % $ 19,059     23 % $ 4,860     25 %
                           

Gross profit

  $ 96,158     80 % $ 62,666     77 % $ 33,492     53 %
                           

        Cost of sales was $23.9 million in 2011 compared to $19.1 million in 2010, an increase of $4.9 million, or 25%. This increase was driven primarily by our increase in revenue in 2011.

        $2.0 million of the $2.8 million increase in our cost of licenses related to costs for a full year and growth of VIPRE license sales, while the remaining $0.8 million represented license-related costs for other licenses associated with our IT Infrastructure operating segment, assuming such operating segment had been in existence at such time.

        $0.9 million of the $1.2 million increase in costs of web-based services, maintenance and subscription revenue was related to the increase in revenue generated by the growth in sales of our TeamViewer product, while $0.3 million was due to share-based compensation. Costs related to IT Infrastructure operating segment revenue increased by $0.5 million driven by royalty expense. Costs related to web-based services, maintenance and subscription revenue associated with our Sunbelt subsidiary decreased by $0.6 million in 2011 compared to 2010, primarily due to savings related to third-party royalty costs (which

64


are no longer incurred because we no longer sell services related to the associated product line, which we disposed of in late 2010), net of increased personnel costs.

        Amortization of acquired software and patents increased by $0.9 million, or 30%, due to a full year of amortization related to the 2010 acquisition of Sunbelt.

        Overall gross profit as a percentage of revenue, or gross margin, increased to 80% in 2011, from 77% in 2010. 53% of the margin improvement was driven by both the increase in the overall percentage of total overall revenue represented by TeamViewer and the gross margin improvement generated by that same product. The remaining gross margin improvement related primarily to the margin improvements generated from Sunbelt due to the elimination of royalty-bearing sales.

    Operating Expenses

 
  Year ended December 31,    
   
 
 
  2011   2010    
   
 
 
  Period to Period Change  
 
   
  % of
Revenue
   
  % of
Revenue
 
 
  Amount   Amount   Amount   Percentage  
 
  (in thousands, except percentages)
 

Research and development

  $ 24,885     21 % $ 14,114     17 % $ 10,771     76 %

Sales and marketing

    52,916     44 %   31,132     38 %   21,784     70 %

General and administrative

    37,757     31 %   16,755     21 %   21,002     125 %

Depreciation, amortization and impairment

    22,475     19 %   18,629     23 %   3,846     21 %
                           

  $ 138,033     115 % $ 80,630     99 % $ 57,403     71 %
                           

        Research and Development.    Research and development expenses increased by $10.8 million, or 76%, to $24.9 million in 2011, from $14.1 million in 2010, due primarily to the impact of a full year of expenses related to our 2010 acquisition of Sunbelt, which accounted for $5.4 million, or 50%, of the increase. The remaining increase was due to our investment in and expansion of our development organization worldwide in order to expand and enhance our product offerings. During 2011, we added a scalable web-conferencing and presentation mode to our TeamViewer product, released significant upgrades to our VIPRE and IT infrastructure products, launched new features on our GFI MAX platform, introduced selected products in additional languages, opened a new office in Edinburgh, Scotland (where we initiated development of our GFI Cloud application for end-users) and Stuttgart, Germany, and added an additional research and development team with our acquisition of Monitis. We expect the related development expenditures made in 2011 to result in the launch of several new products in 2012, including new SaaS products and our VIPRE Mobile Security for Android offering. In 2011 our headcount in research and development increased by 79, from 209 at December 31, 2010 to 288 at December 31, 2011.

        As we continue to increase our research and development headcount to further strengthen and enhance our solutions, we expect our research and development expenses to modestly increase as a percentage of revenue over the next year and decline as a percentage of revenue thereafter.

        Sales and Marketing.    Sales and marketing expenses increased by $21.8 million, or 70%, to $52.9 million in 2011, from $31.1 million in 2010. $9.8 million of the increased expense related to spending on marketing programs. Our expenditures on marketing programs worldwide included focused online marketing campaigns to drive prospective customers to our websites through banner advertising and search engines, channel recruitment programs, test marketing and public relations for newly acquired products, as well as targeted expansion of existing products into new markets plus costs incurred to re-launch our website and invest in a lead nurturing system. The remaining $12.0 million increase primarily related to our continued investment in and expansion of our sales and marketing operations across the world and included $1.6 million of share-based compensation. The remaining $10.4 million increase excludes

65


marketing programs and was mainly attributable to the increase in our worldwide sales and marketing personnel between 2010 and 2011 from 193 employees as of December 31, 2010 to 246 employees as of December 31, 2011. $4.8 million of the $10.4 million increase in expenses related to the full year and growth related to our 2010 acquisition of Sunbelt.

        We expect to continue to invest in the expansion of our global business and the development of new markets at levels consistent with 2011. Accordingly, we expect our sales and marketing expenses to increase in absolute dollars but to decline as a percentage of revenue over time.

        General and Administrative.    General and administrative expenses increased by $21.0 million, or 125%, to $37.8 million in 2011, from $16.8 million in 2010. During 2011 we incurred a $9.7 million increase in costs associated with our readiness to become a public company, which are primarily reflective of audit-related costs for multiple years. $6.2 million of the remaining $11.3 million increase related to share-based compensation. The remaining $5.1 million increase primarily related to investment in key hires and other staffing required to support a public company. Among the 40 general and administrative hires made during 2011 were the addition of 15 finance and legal hires, including a chief financial officer and general counsel, as well as other senior-level executives plus significant expansion of our IT function, and the recruitment and appointment of independent Board members.

        Depreciation, Amortization and Impairment.    Depreciation, amortization and impairment increased by $3.8 million, or 21%, to $22.5 million in 2011, from $18.6 million in 2010. The $3.8 million increase in expense was comprised of an increase of $1.3 million of amortization primarily related to our acquired customer base, $1.1 million of depreciation related to expenditures for computer equipment across the expanding organization, and $1.4 million related to the impairment of certain acquired software.

    Non-Operating Expenses and Income

 
  Year ended December 31,    
   
 
 
  2011   2010    
   
 
 
  Period to Period Change  
 
   
  % of
Revenue
   
  % of
Revenue
 
 
  Amount   Amount   Amount   Percentage  
 
  (in thousands, except percentages)
 

Non-Operating income/(expense)

                                     

Gain on disposal of product lines

  $ 95     0 % $ 1,665     2 % $ (1,570 )   (94 )%

Unrealized exchange fluctuations

    (3,362 )   (3 )%   (2,993 )   (4 )%   (369 )   12 %

Finance revenue

    84     0 %   96     0 %   (12 )   (13 )%

Finance costs

    (10,203 )   (8 )%   (16,576 )   (20 )%   6,373     (38 )%
                           

Total non-operating income/(expense)

  $ (13,386 )   (11 )% $ (17,808 )   (22 )% $ 4,422     (25 )%
                           

        Net non-operating expenses decreased by $4.4 million, or 25%, to $13.4 million in 2011, from $17.8 million in 2010. This decrease in net expense was primarily related to the $6.0 million reduction in interest expense primarily related to our convertible preferred equity certificates, offset by the $1.6 million reduction in one-time gains associated with the disposal of certain product lines.

    Income Tax

 
  Year ended December 31,    
   
 
 
  2011   2010    
   
 
 
  Period to Period Change  
 
   
  % of
Revenue
   
  % of
Revenue
 
 
  Amount   Amount   Amount   Percentage  
 
  (in thousands, except percentages)
 

Tax benefit

  $ 3,325     3 % $ 7,493     9 % $ (4,168 )   (56 )%

66


        Our tax benefit decreased by $4.2 million, or 56%, to $3.3 million in 2011, from $7.5 million in 2010. This decrease in tax benefit resulted from a decrease in our effective tax rate from 20.9% in 2010 to 6.0% in 2011. The decrease in our effective tax rate was largely a result of an increase in unrecognized deferred tax assets to $10.1 million as of December 31, 2011, and a $1.5 million decrease caused by differences in the statutory tax rates of subsidiaries operating in other tax jurisdictions, which partially offset our additional tax benefit from the increase in our loss before taxation of $19.5 million from 2010 to 2011.

Comparison of the Years Ended December 31, 2010 and 2009

    Revenue

 
  Year ended December 31,    
   
 
 
  2010   2009    
   
 
 
  Period to Period Change  
 
   
  % of
Revenue
   
  % of
Revenue
 
 
  Amount   Amount   Amount   Percentage  
 
  (in thousands, except percentages)
 

Revenue:

                                     

Web-based services, maintenance and subscription

  $ 63,455     78 % $ 34,252     68 % $ 29,203     85 %

Licenses

    18,270     22 %   15,884     32 %   2,386     15 %
                           

Total revenue

  $ 81,725     100 % $ 50,136     100 % $ 31,589     63 %
                           

        Revenue was $81.7 million in 2010 compared to $50.1 million in 2009, an increase of $31.6 million, or 63%, primarily due to the impact of acquisitions. Of the $31.6 million increase, $30.7 million of the growth resulted from the acquisition of businesses during 2009 and 2010, and $0.9 million resulted from growth of our business before these acquisitions. The $30.7 million of acquisition growth was comprised of $15.0 million of growth due to the 2010 acquisition of Sunbelt and $15.7 million of growth relating to other businesses acquired in 2009. Organic growth of the businesses acquired in 2009 accounted for approximately $12.0 million of that $15.7 million increase. We calculated organic growth based on the assumption that the acquisitions had taken place at the beginning of the year.

    Cost of Sales and Gross Profit

 
  Year ended December 31,    
   
 
 
  2010   2009    
   
 
 
  Period to Period Change  
 
   
  % of
Revenue
   
  % of
Revenue
 
 
  Amount   Amount   Amount   Percent  
 
  (in thousands, except percentages)
   
 

Cost of sales:

                                     

Web-based services, maintenance and subscription

  $ 13,296     16 % $ 6,836     14 % $ 6,460     94 %

Licenses

    2,773     3 %   903     2 %   1,870     207 %

Amortization of acquired software and patents

    2,990     4 %   1,216     2 %   1,774     146 %
                           

Total cost of sales

  $ 19,059     23 % $ 8,955     18 % $ 10,104     113 %
                           

Gross profit

  $ 62,666     77 % $ 41,181     82 % $ 21,485     52 %
                           

        Cost of sales was $19.1 million in 2010 compared to $9.0 million in 2009, an increase of $10.1 million, or 113%, primarily due to the impact of acquisitions. Of the $10.1 million increase, $9.6 million of the growth was attributable to businesses acquired during 2009 and 2010, with the remaining $0.5 million of growth coming from our legacy business.

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        Overall gross profit as a percentage of revenue, or gross margin, decreased to 77% in 2010, from 82% in 2009, primarily due to the impact of the Sunbelt acquisition. Historically, Sunbelt has achieved a lower gross margin compared to our other operating subsidiaries because of higher royalty expenses related to certain license products. These license products were disposed of in December 2010.

    Operating Expenses

 
  Year ended December 31,    
   
 
 
  2010   2009    
   
 
 
  Period to Period Change  
 
   
  % of
Revenue
   
  % of
Revenue
 
 
  Amount   Amount   Amount   Percentage  
 
  (in thousands, except percentages)
 

Research and development

  $ 14,114     17 % $ 6,495     13 % $ 7,619     117 %

Sales and marketing

    31,132     38 %   16,369     32 %   14,763     90 %

General and administrative

    16,755     21 %   7,474     15 %   9,282     124 %

Depreciation, amortization and impairment

    18,629     23 %   10,317     20 %   8,311     81 %
                           

  $ 80,630     99 % $ 40,655     81 % $ 39,975     98 %
                           

        Research and Development.    Research and development expenses increased by $7.6 million, or 117%, to $14.1 million in 2010, from $6.5 million in 2009, primarily due to the impact of acquisitions. The increase was primarily due to an additional $5.4 million of research and development expenses associated with Sunbelt incurred after the acquisition in 2010, and an additional $1.4 million of expenses incurred as a result of a full year of expense in 2010 for HoundDog and Katharion, compared to a partial year of expense during 2009, the year during which each company was acquired. There was also an additional $1.1 million of expenses for TeamViewer GmbH due to a partial year of expense in 2009. We incurred higher personnel costs due to headcount increases within research and development. In 2010, our total headcount in research and development increased by 135, from 74 at December 31, 2009 to 209 at December 31, 2010.

        Sales and Marketing.    Sales and marketing expenses increased by $14.8 million, or 90%, to $31.1 million in 2010, from $16.4 million in 2009. The increase was primarily due to an additional $6.7 million of expenses associated with Sunbelt incurred after the acquisition in 2010, and an additional $2.3 million of expenses incurred as a result of a full year of expenses in 2010 for HoundDog and Katharion compared to a partial year in 2009, the year during which each company was acquired. There was also an additional $4.7 million of expenses associated with TeamViewer GmbH due to a partial year of expense in 2009, plus an increase in direct marketing and advertising spending to increase and enhance market awareness of our solutions.

        General and Administrative.    General and administrative expenses increased by $9.3 million, or 124%, to $16.8 million in 2010, from $7.5 million in 2009. The increase was due to an additional $2.5 million of expenses associated with Sunbelt incurred after the acquisition in 2010, and an incremental $1.7 million of expenses incurred as a result of a full year of expenses in 2010 for TeamViewer GmbH, HoundDog and Katharion, compared to a partial year in 2009, the year of acquisition of each company. $1.9 million of the remaining $5.1 million increase relates to increased transaction costs. Transaction costs related to the Merger in November 2010 were $3.3 million.

        Depreciation, Amortization and Impairment.    Depreciation, amortization and impairment increased by $8.3 million, or 81%, to $18.6 million in 2010, from $10.3 million in 2009. The increase was primarily due to an additional $1.6 million of expenses associated with Sunbelt during 2010, and an additional $7.9 million of expenses associated with TeamViewer GmbH as a result of a full year of expense in 2010, compared to a partial year of expense during 2009, the year of the acquisition of TeamViewer GmbH. These increases

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were primarily offset by a decrease of amortization expense due to less amortization associated with intangible assets in 2010 which were fully amortized.

    Non-Operating Expenses and Income

 
  Year ended December 31,    
   
 
 
  2010   2009    
   
 
 
  Period to Period Change  
 
   
  % of
Revenue
   
  % of
Revenue
 
 
  Amount   Amount   Amount   Percentage  
 
  (in thousands, except percentages)
 

Non-Operating income/(expense)

                                     

Gain on disposal of product lines

  $ 1,665     2 % $     0 % $ 1,665      

Unrealized exchange fluctuations

    (2,993 )   (4 )%   446     1 %   (3,439 )   (771 )%

Finance revenue

    96     0 %   41     0 %   55     134 %

Finance costs

    (16,576 )   (20 )%   (13,659 )   (27 )%   (2,917 )   21 %
                           

Total non-operating income/(expense)

  $ (17,808 )   (22 )% $ (13,172 )   (26 )% $ (4,636 )   35 %
                           

        Net non-operating expenses increased by $4.6 million, or 35%, to $17.8 million in 2010, from $13.2 million in 2009. This increase was primarily the result of an increase of $2.9 million in finance costs related to interest-bearing loans and borrowings and a $3.4 million unfavorable change in unrealized foreign exchange rate fluctuations, primarily related to our intercompany balances with and between our subsidiaries and our debt balances. These items were offset by a gain of $1.7 million during 2010 on the disposal of two product lines.

    Income Tax

 
  Year ended December 31,    
   
 
 
  2010   2009    
   
 
 
  Period to Period Change  
 
   
  % of
Revenue
   
  % of
Revenue
 
 
  Amount   Amount   Amount   Percentage  
 
  (in thousands, except percentages)
 

Tax benefit

  $ 7,493     9 % $ 3,320     7 % $ 4,173     126 %

        Our tax benefit increased by $4.2 million, or 126%, to $7.5 million in 2010 from $3.3 million in 2009. This increase resulted from an increase in our loss before taxation of $23.1 million from 2009 to 2010, and was partially offset by a decrease in our effective tax rate from 26.3% in 2009 to 20.9% in 2010 as a result of expected refunds from the Maltese tax authorities on dividend distributions to shareholders, the impact of the differences in the statutory tax rates of subsidiaries operating in other tax jurisdictions, and the impact of our tax treatment in Luxembourg.

Liquidity and Capital Resources

    Overview

        Historically, our primary source of liquidity has been cash generated from operations. Distributions to our shareholders have been financed primarily by bank loans while acquisitions have generally been financed by equity offerings to existing shareholders and by bank loans and other borrowings. As of December 31, 2011, we had cash totaling $16.5 million and we owed a principal balance of $220.2 million under interest bearing loans and borrowings, including $203.2 million of borrowings under our senior secured credit facility and $16.9 million of subordinated notes due to certain of our shareholders.

        We believe that our existing cash and cash equivalents, together with our expected cash flows from operations, will be sufficient to meet our anticipated cash requirements for working capital, capital expenditures, contractual obligations and commitments, including our debt service requirements for at

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least the next 12 months. We estimate our capital expenditures for 2012 to be approximately $4.5 million, primarily comprised of office expansion costs and the purchase of computer and other office equipment. Our future capital requirements will depend on many factors, including our rate of revenue growth, the expansion of our sales and marketing activities, the timing and extent of spending to support product development efforts and expansion into new territories, the timing of introductions of new software products and enhancements to existing software products, and the continuing market acceptance of our software solutions. Accordingly, we will continue to seek new sources of debt and equity financing, including funds generated through this offering, to expand our cash balances, financial resources and available credit to ensure our ability to meet commitments and to fund our operational plans. Additionally, to the extent we engage in future acquisitions, these transactions may be funded by further debt and equity financings.

        We will also incur costs as a public company that we have not previously incurred, including, but not limited to, increased insurance premiums, including directors and officers insurance, investor relations fees, expenses for compliance with the Sarbanes-Oxley Act of 2002 and rules implemented by the SEC and the stock exchange on which our common shares will be listed, and various other costs.

    Indebtedness

    2011 Senior Secured Credit Facility

        In September 2011, the registrant, TV GFI (as borrower) and certain direct and indirect subsidiaries of the registrant entered into a five-year senior secured credit facility with a syndicate of lenders led by JPMorgan Chase Bank, N.A., as administrative agent, pursuant to which we obtained the following loans and commitments: dollar and euro tranche term loans in principal amounts of $154.2 million and €30.0 million ($40.8 million), respectively, and, available for future borrowings, revolving loans, swingline loans and letters of credit in an aggregate principal amount not to exceed $10.0 million at any one time, and an incremental term facility of $15.0 million. Amounts borrowed under the term loans that are repaid may not be reborrowed. The revolving and swingline loans may be repaid and reborrowed. All dollar borrowings (other than swingline loans) bear interest, at our election, at the alternate base rate plus 5.75% per annum or adjusted LIBOR for one-, two-, three-, six-, or, if agreed to by all relevant lenders, nine- or twelve-month interest periods, plus 6.75% per annum, respectively. All borrowings in euros bear interest by reference to adjusted LIBOR, and all swingline borrowings bear interest by reference to the alternate base rate. LIBOR is determined by reference to the London inter-bank rate for deposits in the applicable currency with comparable interest periods. Adjusted LIBOR includes (1) with respect to borrowings denominated in dollars, statutory reserves and (2) with respect to borrowings denominated in euros, the mandatory cost rate. Adjusted LIBOR is deemed to be not less than 1.25%. The alternate base rate is the greatest of (1) the JPMorgan Chase Bank, N.A. prime rate, (2) the weighted average of rates on overnight U.S. federal funds as published by the Federal Reserve Bank of New York plus one-half of 1% and (3) adjusted LIBOR for a deposit in dollars with a one-month interest period plus 1%. The alternate base rate is deemed to be not less than 2.25%.

        All proceeds from the issuance of the term loans were used for the payment of fees and expenses in connection with our senior secured credit facility and the repayment of principal and interest under our previous credit facility, as well as certain distributions to the holders of our preferred equity then in existence. Any future proceeds received from borrowings under the revolving credit facility, swingline loans and letters of credit must be used for working capital and other obligations incurred in the ordinary course of business. All borrowings under our senior secured credit facility are subject to the satisfaction of customary conditions, including absence of a default and accuracy of representations and warranties.

        All of our obligations under our senior secured credit facility are guaranteed by certain of our existing and subsequently acquired or organized wholly owned subsidiaries (subject to certain limitations under the applicable law governing certain subsidiaries). All of our obligations under our senior secured credit

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facility are secured by substantially all of our assets and certain of our wholly owned subsidiaries (subject to certain exceptions), including, but not limited to (1) a first-priority pledge of all of the capital stock held by us or any other wholly owned subsidiary providing security for the facility and (2) perfected first-priority security interests in, and mortgages on, substantially all tangible and intangible assets of us and certain of our wholly owned existing or subsequently acquired subsidiaries (including but not limited to accounts, inventory, intellectual property, certain real property, cash and proceeds of the foregoing).

        Under the terms of our senior secured credit facility, we are required to comply with a variety of affirmative, negative and financial covenants, including a leverage ratio and a fixed charge coverage ratio. The leverage ratio is the ratio of consolidated indebtedness for the registrant, TV GFI and our other subsidiaries as of such date to our consolidated EBITDA (as defined in our senior secured credit facility) for the period for four consecutive fiscal quarters most recently ended on or prior to such date. The leverage ratio for the following periods may not exceed the following limit:

Period
  Leverage Ratio  

December 31, 2011 to but excluding June 30, 2012

    3.75 to 1.00  

June 30, 2012 to but excluding September 30, 2012

    3.50 to 1.00  

September 30, 2012 to but excluding December 31, 2012

    3.25 to 1.00  

On and after December 31, 2012

    3.00 to 1.00  

        The fixed charge coverage ratio is the ratio of our consolidated EBITDA less capital expenditures to consolidated fixed charges, in each case for any period of four consecutive fiscal quarters. For the purpose of calculating the fixed charge coverage ratio, if TV GFI, as borrower, or any direct or indirect subsidiary of the registrant incurs, assumes, guarantees, makes any voluntary or mandatory prepayment, repurchases or otherwise voluntarily discharges indebtedness during the period of four consecutive fiscal quarters, then the fixed charge coverage ratio will be calculated giving pro forma effect to such incurrence, assumption, guarantee, prepayment, repurchase or discharge as if it occurred on the first day of the applicable four consecutive fiscal quarter period. The fixed charge coverage ratio for any period of four consecutive quarters may not be less than the following:

Period
  Fixed Charge Ratio  

March 31, 2012 to but excluding September 30, 2012

    1.10 to 1.00  

On and after September 30, 2012

    1.20 to 1.00  

        Our senior secured credit facility contains certain customary negative covenants, including limitations on debt, guarantees and hedging arrangements, limitations on liens and sale-leaseback transactions, limitations on changes in business conducted by us and our subsidiaries, limitations on loans, investments, advances, guarantees and acquisitions, limitations on asset sales, limitations on dividends on, and redemptions and repurchases of, equity interests and other restricted payments, limitations on prepayments, redemptions and repurchase of other debt, limitations on transactions with affiliates, limitations on restrictions on the ability of subsidiaries to incur liens and to pay dividends and make distributions and a negative covenant which restricts our ability and that of our subsidiaries to amend material agreements or the organizational documents of the registrant or any of our subsidiaries in any manner materially adverse to the lenders under our senior secured credit facility.

        Our senior secured credit facility also contains certain customary representations and warranties, affirmative covenants and events of default, including payment defaults, defaults for material breaches of representations and warranties, covenant defaults, cross-defaults and cross-acceleration to certain other material indebtedness, certain events of bankruptcy, certain events under ERISA, material judgments, actual or asserted failures of any guaranty or lien on a material amount of collateral supporting our senior secured credit facility to be in full force and effect and changes of control. If an event of default occurs, the lenders under our senior secured credit facility are entitled to take various actions, including acceleration of amounts due and all actions permitted to be taken by a secured creditor.

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        In December 2011, we obtained a waiver of default from JPMorgan Chase Bank, N.A. and the required lenders arising from our failure to deliver our 2010 consolidated audited financial statements to the administrative agent within 45 days after September 14, 2011. As of December 31, 2011, we were in compliance with all covenants.

    2011 Subordinated Convertible Promissory Notes

        In November 2011 we issued nine convertible subordinated promissory notes in the aggregate principal amount of approximately €13.1 million ($17.7 million) to parties that held our then-existing class B preferred shares. We did not receive any cash proceeds from the issuance of the convertible subordinated promissory notes, which were issued in connection with the second of two cash distributions to these shareholders and as part of a series of transactions whereby all of our outstanding class B preferred shares were converted into an equivalent number of class A common shares. See "Certain Transactions" for further discussion of the transactions surrounding the issuance of our convertible subordinated promissory notes.

        The convertible subordinated promissory notes are subordinate to our obligations under our senior secured credit facility and mature 190 days after the settlement of our obligations under our senior secured credit facility and bear interest at a rate that is tied to the quarterly average rate payable on our senior secured credit facility as described above.

    Other Indebtedness

        In connection with our 2009 acquisition of HoundDog, we issued to the sellers of HoundDog subordinated promissory notes in an aggregate principal amount of $5.0 million. In June 2011, we fully repaid these notes.

    Cash at Bank and in Hand

        Our cash at bank and in hand at December 31, 2011 was held for working capital purposes and consisted of cash at banks and in hand and short-term, highly liquid investments readily convertible to known amounts of cash with an original maturity date of three months or less. We do not enter into investments for trading or speculative purposes and as such we do not believe that our cash and cash equivalents are subject to significant risk of changes in value.

        Much of our cash is generated by payments received from customers in advance of revenue being recognized. Under applicable accounting standards, a substantial portion of the revenue associated with our web-based services, maintenance and subscription offerings is recognized in periods subsequent to the period in which the cash is received. This has led to a deferred revenue balance of $43.4 million, $117.7 million and $190.2 million as of December 31, 2009, 2010 and 2011, respectively, and a correspondingly large influx of cash over the years relative to revenue earned.

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    Cash Flows

        The following table shows our cash flows from operating activities, investing activities and financing activities for the stated periods:

 
  As of and For the Year Ended December 31,  
 
  2009   2010   2011  
 
  (in thousands)
 

Net cash provided by operating activities

  $ 18,069   $ 55,007   $ 59,939  

Net cash used in investing activities

    (97,494 )   (15,995 )   (9,656 )

Net cash (used in)/provided by financing activities

    82,055     (25,296 )   (56,208 )
               

Net increase (decrease) in cash

    2,630     13,716     (5,925 )

Effect of foreign exchange rate changes on cash

    145     (64 )   (270 )

Cash at bank and in hand, beginning of period

    6,292     9,067     22,719  
               

Cash at bank and in hand, end of period

  $ 9,067   $ 22,719   $ 16,524  
               

    Cash Provided by Operating Activities

        Operating activities provided $59.9 million of net cash in 2011. Net cash inflows from operating activities resulted primarily from net changes in working capital of $86.9 million, which was driven most notably by an increase in deferred revenue of $80.2 million primarily attributable to our Collaboration operating segment, assuming such operating segment had been in existence during such time. The loss before taxation of $55.3 million was offset by $50.3 million in non-cash and non-operating adjustments which included amortization and depreciation and impairment of $26.4 million, non-operating net finance costs of $10.1 million, share-based compensation expense of $10.2 million, unrealized exchange differences of $3.4 million, and various other net non-cash adjustments totaling $0.2 million, which comprised a gain on disposal of a product line, put option expense, loss on sale of property, plant and equipment, receivables impairment and interest adjustment. Net operating cash was also decreased by income tax payments of $22.0 million.

        Operating activities provided $55.0 million of net cash in 2010. Net cash inflows from operating activities resulted primarily from net changes in working capital of $58.5 million, which was driven most notably by an increase in deferred revenue of $61.8 million primarily due to our Collaboration operating segment and, to a lesser extent, the Sunbelt acquisition. The loss before taxation of $35.8 million was offset by $40.6 million in non-cash and non-operating adjustments which included amortization and depreciation of $21.6 million, non-operating net finance costs of $16.5 million, unrealized exchange differences of $3.0 million, less a gain on disposal of product line of $1.7 million and various other net non-cash adjustments totaling $1.2 million, which comprised put option expense, share-based compensation expense and a receivables impairment. Net operating cash was also reduced by income tax payments, net recoveries, of $8.4 million.

        Operating activities provided $18.1 million of net cash in 2009. The loss before taxation of $12.6 million was offset primarily by $25.5 million in non-cash and non-operating adjustments which included amortization and depreciation of $11.5 million, net finance costs of $13.6 million, and various other net non-cash adjustments totaling $0.3 million, which comprised share-based payments, unrealized exchange differences, movement in fair value of derivative financial instruments, a gain on the sale of property, plant and equipment and impairment of receivables. Net cash inflows from operating activities were also driven by net changes in working capital of $13.6 million, which was driven most notably by an increase in deferred revenue of $21.3 million offset by an increase in trade and other receivables of $6.4 million. Net operating cash was also decreased by income tax payments, net recoveries, of $8.5 million.

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    Cash Used in Investing Activities

        Net cash used in investing activities was $9.7 million, $16.0 million and $97.5 million for the years ended December 31, 2011, 2010 and 2009, respectively. Our primary activity in 2009 and 2010 related to investing in strategic acquisitions and capital expenditures related to property, plant, equipment and intangible assets, as we continued to expand our infrastructure and workforce. In 2011 our investment in these areas was slightly more focused on expanding our infrastructure and outfitting our workforce.

        Cash used in investing activities for the year ended December 31, 2011 included $4.5 million for acquisitions or investments in subsidiaries, including $3.5 million for the Monitis acquisition to deepen our investment in cloud-based technologies and $1.0 million representing deferred consideration owed in connection with the 2009 acquisition of Katharion. Cash used in investing activities also included $5.3 million related to the purchase of property, plant and equipment, plus certain intangible assets. These investment outflows were partially offset by proceeds of $0.2 million from the disposal of two product lines.

        Cash used in investing activities for the year ended December 31, 2010 included $15.3 million for the Sunbelt acquisition to expand our security-related product offerings and $2.3 million related to the purchase of property, plant and equipment, plus certain intangible assets. These investment outflows were partially offset by proceeds of $1.6 million from the disposal of certain product lines.

        Cash used in investing activities for the year ended December 31, 2009 included $94.9 million for the acquisitions of TeamViewer GmbH, HoundDog and Katharion pursuant to which we entered the collaboration and SaaS markets. An additional investment of $1.8 million related to the purchase of intangible assets and $0.9 million related to purchases of property, plant and equipment.

        We have made capital expenditures primarily for computer equipment, computer software and office expansion. Our capital expenditures totaled $0.9 million in 2009, $2.2 million in 2010 and $5.3 million in 2011. As of December 31, 2011, we did not have any significant capital commitments.

    Cash Provided by (Used in) Financing Activities

        Net cash used in financing activities was $56.2 million and $25.3 million for the years ended December 31, 2011 and 2010, respectively, while the year ended December 31, 2009 produced net cash inflows from investing activities of $82.1 million. Equity issuances and bank borrowings have provided a source of financing in all three years, which have been offset by repayments of borrowings, share repurchases and interest paid on borrowings.

        Net cash used in financing activities for the year ended December 31, 2011 included outflows of $157.2 million for the repurchase of our class B preferred shares, $92.0 million for repayments of borrowings and $11.5 million paid for interest. Cash outflows have been substantially offset by $204.4 million in proceeds from bank borrowings.

        Net cash used in financing activities for the year ended December 31, 2010 included outflows of $51.8 million for interest and repayments on borrowings which were partially offset by inflows related to $6.2 million from equity issuances and $20.3 million of proceeds from bank borrowings.

        Net cash provided by financing activities for the year ended December 31, 2009 included proceeds of $104.6 million, primarily from the issuance of our convertible preferred equity certificates and from bank borrowings, offset by $22.5 million of interest and repayments on borrowings. See "—Critical Accounting Policies and Estimates—Fair value of convertible preferred equity certificates" below for a further discussion of our convertible preferred equity certificates.

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Contractual Obligations and Commitments

        We generally do not enter into long-term, minimum purchase commitments. Our principal commitments, in addition to those related to our long-term debt discussed below, consist of obligations under facility leases for office space.

        The following table summarizes our outstanding contractual obligations as of December 31, 2011:

 
  Payments Due by Period as of December 31, 2011  
 
  Total   Less than 1
Year
  1-3 Years   3-5 Years   More than 5
Years
 
 
  (in thousands)
 

Long-term debt obligations(1)

  $ 220,215   $ 21,182   $ 41,665   $ 140,450   $ 16,918  

Interest payments(1)(2)

    63,410     15,221     26,355     14,728     7,106  

Operating lease obligations

    7,983     2,310     4,264     1,409      

Other payables

    889         889          

Purchase obligations

    4,158     2,912     1,246          
                       

  $ 296,655   $ 41,625   $ 74,419   $ 156,587   $ 24,024  
                       

(1)
A portion of our long-term debt obligations, totaling $54.8 million and related interest payments as of December 31, 2011, is denominated in euros. For purposes of this disclosure, we have calculated our future debt payment obligations using the spot rate for December 31, 2011, or €1.00 = $1.2959. Actual future payments may differ from these estimates.

(2)
The interest payable on our senior secured credit facility and our convertible subordinated promissory notes is subject to variable rates. For purposes of this disclosure, we calculated our future interest payment obligations using the interest rate in effect as of December 31, 2011, or 8%. Actual future payments may differ from these estimates.

        In addition to the above amounts, we had other contractual obligations as of December 31, 2011 for which we were unable to estimate the timing of payments as of such date. In October 2010, we entered into an option purchase agreement with an employee. Pursuant to the understanding with the employee, in April 2012 the employee had the option to either retain options to purchase 105,000 shares in GFI Holdings, or sell the full amount of such options to us for $0.5 million. As a result of this transaction, using the weighted average cost of capital to calculate the present value of expected future cash flows, we determined a fair value of the potential liability and compared it to the equity value of the options at the date of grant. As a result of this analysis, for all reporting periods from October 2010 until this obligation is terminated, management determined that the grant should be accounted for as a liability. As of December 31, 2011, we held a liability for the options valued at approximately $0.5 million. Amounts due to shareholders totaled $2.8 million as of December 31, 2011 and represent non-interest bearing loans which are unsecured, interest-free and repayable on demand.

Off-Balance Sheet Arrangements

        Several of our subsidiaries have entered into operating leases for office facilities, computer hardware and certain other equipment. These arrangements are sometimes referred to as a form of off-balance sheet financing. Rental expenses under these operating leases are set forth above under "—Contractual Obligations and Commitments." We do not have other forms of material off-balance sheet arrangements that would require disclosure other than those already disclosed.

Critical Accounting Policies and Estimates

        We prepare our consolidated financial statements in accordance with IFRS as issued by the International Accounting Standards Board, which requires us to make judgments, estimates and

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assumptions. We continually evaluate these judgments, estimates and assumptions based on the most recently available information, our own historical experience and various other factors that we believe to be reasonable under the relevant circumstances. Because the use of estimates is an integral component of the financial reporting process, actual results could differ from our expectations.

        An accounting policy is considered critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time such estimate is made, or if different accounting estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact our consolidated financial statements. We believe the following to be critical accounting policies because they are important to the portrayal of our financial condition or results of operations and they require critical management estimates and judgments about matters that are uncertain:

    share-based compensation;

    revenue recognition;

    fair value of other intangible assets;

    other intangible assets with indefinite useful life;

    impairment of goodwill and other intangible assets;

    fair value of deferred revenue acquired in business combinations;

    fair value measurement of contingent consideration;

    fair value of our convertible subordinated promissory notes;

    fair value of our convertible preferred equity certificates; and

    deferred income taxes.

        The following descriptions of critical accounting policies, judgments and estimates should be read in conjunction with our consolidated financial statements and other disclosures included in this prospectus.

    Share-Based Compensation

        Share-based compensation includes grants of options to purchase common shares and grants of restricted stock. Currently, we maintain one share option plan pursuant to which we may grant options to purchase our common shares to our employees, directors, officers and prospective employees. We refer to this plan as the "2011 Plan." Our 2011 Plan was adopted in March 2011. Prior to such time, we did not maintain any equity incentive plans; as a result, we did not grant any share options during 2009 and 2010 (although stock options were granted in 2009 with respect to GFI Holdings, as discussed below). Share options granted by us under the 2011 Plan since its inception are set forth in further detail below under "—Valuations Under the 2011 Plan." Grants of share options under the 2011 Plan were exempt from the registration requirements of the Securities Act in reliance on Section 4(2) of the Securities Act, and the rules and regulations promulgated thereunder (including Regulation D and Rule 506), Regulation S, as offshore transactions by an issuer with no directed selling efforts in the United States, or Rule 701, as transactions pursuant to a compensatory benefit plan. Recipients of share options represented to us their intention to acquire securities for investment only and to hold the securities for an indefinite period. Where relevant, recipients of options issued in reliance on Section 4(2) of the Securities Act represented to us that they were "accredited investors," as that term is defined in Rule 501 of Regulation D promulgated under the Securities Act, and either received adequate information about the Company or had access, as a result of their service for the Company, to such information. None of the transactions involved any underwriters, underwriting discounts or commissions, or any public offering.

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        In addition, GFI Software Holdings Ltd., or "GFI Holdings," a shareholder of the registrant, also maintains equity incentive plans pursuant to which certain of our employees, directors and officers hold equity incentive grants, including share option grants and grants of restricted stock, relating to equity of GFI Holdings. We refer to these equity incentive plans as the "GFI Holdings Plans." For further discussion of the 2011 Plan and the GFI Holdings Plans, see "Management—Equity Incentive Plans" below.

        We measure the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date on which they are granted. Estimating fair value for share-based payment transactions requires determining the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model, including the expected life of the share option, volatility and dividend yield, and making certain assumptions about the share option. We describe the assumptions and models that we use to estimate the fair value for share-based payment transactions in our financial statements included with this prospectus.

        Our share-based compensation expense is as follows:

 
  Year Ended December 31,  
 
  2009   2010   2011  
 
  (in thousands)
 

Cost of revenue

  $ 25   $ 34   $ 321  

General and administrative

    281     442     6,688  

Research and development

    55     63     1,153  

Sales and marketing

    148     453     2,076  
               

Total share-based compensation

  $ 509   $ 992   $ 10,238  
               

        We use the Black-Scholes option pricing model to value our share option awards. The Black-Scholes option pricing model requires the input of subjective assumptions, including assumptions about the expected life of share-based payment awards and share price volatility. In addition, as a private company, one of the most subjective inputs into the Black-Scholes option pricing model is the estimated fair value of our common shares. As a private company, our share price does not have sufficient historical volatility for us to adequately assess the fair market value of our share option grants. Therefore, for all share option grants, we use comparable public companies as a basis for determining our expected volatility. We intend to continue to consistently apply this methodology of using comparable companies until a sufficient amount of historical information regarding the volatility of our own share price becomes available.

        For periods prior to January 1, 2011, the expected term for share option grants to employees is based on an analysis of the disclosed expected terms of comparable public companies. As of January 1, 2011, the expected term for share option grants to employees is based on the midpoint method in accordance with IFRS 2, Share-based Payment, or IFRS 2. The risk-free interest rate is based on the United States Treasury yield curve as of the date of grant with a remaining term equal to the expected life of the grant. The assumptions used in calculating the fair value of the share-based payment awards represent management's best estimate and involve inherent uncertainties and the application of management's judgment. As a result, if factors change and management uses different assumptions, share-based compensation expense could be materially different in the future.

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        For the years ended December 31, 2009, 2010 and 2011, we calculated the fair value of share options granted under the GFI Holdings Plans using the Black-Scholes option pricing model with the following assumptions:

 
  2009   2010*   2011

Volatility

  40%     24–44%

Expected term, in years

  5.0     5.0–6.2

Dividend yield

  0%     0%

Risk-free interest rate

  2.92%     2.00%

*
During 2010, we did not grant any share options.

        For the year ended December 31, 2011, we calculated the fair value of share options granted under the 2011 Plan using the Black-Scholes option pricing model with the following assumptions:

 
  2011

Volatility

  35–44%

Expected term, in years

  5.5–7.5

Dividend yield

  0%

Risk-free interest rate

  0.87–2.70%

        In accordance with IFRS 2, we recognize expense based on the share option grant's pre-defined vesting schedule over the requisite service period using the accelerated method for all employee share options. In addition to the assumptions used to calculate the fair value of the share options, we are required to estimate the expected forfeiture rate of all share-based awards and only recognize expense for those awards expected to vest. The estimation of the number of share awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from our current estimates, such amounts will be recorded as a cumulative adjustment in the period in which estimates are revised. We consider many factors when estimating expected forfeitures, including employee position, historical employee turnover data and an analysis of our historical and known forfeitures on existing awards. During the period in which the share options vest, we will record additional expense if the actual forfeiture rate is lower than the estimated forfeiture rate, and a recovery of expense if the actual forfeiture rate is higher than estimated.

        Based upon an assumed initial public offering price of $            per share, which is the estimated midpoint of the range listed on the cover page of this prospectus, the aggregate intrinsic value of our share options outstanding as of                        , 2012 was $             million, of which $             million related to vested share options and $             million related to unvested share options.

    Valuation of Share Options

        We did not grant any share options during the year ended December 31, 2010. For all share option grants during the year ended December 31, 2011, the fair value of the common shares underlying the share option grants was determined by our Board, with the assistance of management. When establishing the fair value of common shares at each grant date, we utilized the guidance provided by the American Institute of Certified Public Accountants, or the "AICPA," in the AICPA Technical Practice Aid: Valuation of Privately-Held-Company Equity Securities Issued as Compensation, which we refer to simply as the "AICPA Practice Aid."

        For valuations performed in the year ended December 31, 2011, our Board, with the assistance of management, used the income approach valuation model and a market approach valuation model in order to estimate the fair value of common shares underlying the share option grants under the GFI Holdings Plans and the 2011 Plan during this period. We believe both of these approaches are appropriate

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methodologies given our stage of development at the time of each valuation. The income approach valuation model utilized a discounted cash flow analysis of the projected cash flows as well as a residual value, which we then discounted to the present in order to arrive at our current equity value. The market approach valuation model utilized the guideline company method by analyzing a population of comparable companies, and selected those technology companies that we considered to be the most comparable to us in terms of product offerings, revenue, margins, and growth. Under the market approach, we use these guideline companies to develop relevant market multiples and ratios, which are then applied to our corresponding financial metrics to estimate our equity value. In determining our equity value, we weighted the income approach and market approach equally.

        In allocating the total equity value between our class B preferred shares in existence until November 2011, and our class A common shares, we considered the liquidation preference allocable to the class B preferred shares in determining valuations performed prior to the elimination of the preference on these shares. Additionally, each valuation during this period utilizes the option-pricing method for allocating the total equity value between class B preferred shares and class A common shares. These valuations reflect discounts for lack of marketability between 15% and 20%, as discussed further below.

        The significant input assumptions used in our valuation models are based on subjective future expectations combined with management's judgment, including market approach assumptions and income approach assumptions.

Market approach assumptions include:

    our expected revenue, operating performance, and cash flows for the current and future years, determined as of the valuation date based on our estimates;

    multiples of market value to trailing revenues, determined as of the valuation date, based on a group of comparable public companies we identified; and

    multiples of market value to expected future growth, determined as of the valuation date, based on the same group of comparable public companies.

Income approach assumptions include:

    our expected revenue, operating performance, and cash flows, determined as of the valuation date based on our estimates;

    a discount rate, which is applied to discretely forecasted future cash flows in order to calculate the present value of those cash flows; and

    a terminal value multiple, which is applied to our last year of discretely forecasted cash flows to calculate the residual value of our future cash flows.

    Valuations under the GFI Holdings Plans

        Below is a summary of share option grants and restricted stock grants issued to employees under the GFI Holdings Plans during the year ended December 31, 2011:

Grant Date
  Options
Granted
  Restricted
Stock
Granted
  Exercise
Price per
Share
  Fair Value
per Share
  Discount for
Lack of
Marketability
 

March 2011

    2,554,690       $ 1.29   $ 1.33     20 %

        As there were no share option grants or restricted stock grants during 2010, we did not perform a valuation during the year ended December 31, 2010. In February 2011, we performed a contemporaneous valuation to estimate the fair value of our common shares for grants made during the year. The significant

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input assumptions used in our valuation models during 2011 are based on subjective future expectations combined with management's judgment. The assumptions utilized in the market and income approaches are consistent with prior grant valuations and as described above.

        The estimated fair value of the common stock of GFI Holdings in March 2011 was $1.33 per share, which represents a $1.16 per share increase from the previous valuation which was performed in December 2009. The increase was driven by the enterprise value of the Company and is described in more detail below. The March 2011 valuation included a discount for lack of marketability of 20%.

        The only asset held by GFI Holdings is an approximate 30% equity interest in the Company; therefore, the fair value of options granted under the GFI Holdings Plans is significantly lower than those granted under the 2011 Plan.

    Valuations under the 2011 Plan

        Below is a summary of share option grants issued to employees under the 2011 Plan during the period beginning January 1, 2011 through March 31, 2012:

Grant Date
  Options
Granted
  Exercise
Price per
Share
  Fair Value
per Share
  Discount for
Lack of
Marketability
 

March 14, 2011

    8,200,549   $ 4.28   $ 4.31     20 %

June 16, 2011

    2,165,536     5.37     5.38     15 %

June 28, 2011

    1,210,398     5.37     5.38     15 %

July 18, 2011

    100,000     5.37     5.38     15 %

August 26, 2011

    273,000     5.66     5.62     15 %

September 6, 2011

    65,000     5.66     5.62     15 %

September 12, 2011

    100,000     5.66     5.62     15 %

September 24, 2011

    208,000     5.66     5.62     15 %

January 26, 2012

    600,000     5.78     5.78     15 %

March 1, 2012

    100,000     5.78     5.78     15 %

        During 2011, we performed contemporaneous valuations to estimate the fair value of our common shares for grants made during the year. The significant input assumptions used in our valuation models during 2011 are based on subjective future expectations combined with management's judgment. The assumptions utilized in the market and income approaches are consistent with prior grant valuations and as described above.

        The estimated fair value of our common shares in February 2011 was $4.31. The February 2011 valuation took into account our estimates of future revenue growth and our future profitability growth using a weighted average cost of capital, or "WACC," of 17.5%, which was based on an analysis of comparable public companies. The valuation also took into account market valuations of those same comparable public companies. The February 2011 valuation included a discount for lack of marketability of 20%.

        The estimated fair value of our common shares in May 2011 was $5.38, which represents an increase of $1.07 per share from the February 2011 valuation. This increase was due to the improvement of our financial performance in 2011, as well as increased projections of future earnings and cash flow growth, using a WACC of 14.5% due to improving market conditions for our products and increased valuations of comparable public companies. The discount for lack of marketability was decreased to 15% as the possibility of our initial public offering increased.

        The estimated fair value of our common shares in July 2011 was $5.62, which represents an increase of $0.24 per share from the May 2011 valuation. This increase was due to revisions in our long-term forecasting of future earnings and cash flows, using a WACC of 14.25%, based on continued improvements

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in our performance due to improving economic conditions and a continued increase in the valuations of comparable public companies. The July 2011 valuation included a discount for lack of marketability of 15%, consistent with that used in the May 2011 valuation.

        The estimated fair value of our common shares in November 2011was $5.78, which represents an increase of $0.16 per share from the July 2011 valuation. This increase was due in part to the elimination of our class B preferred shares and the related issuance of class A common shares in exchange therefor. This transaction eliminated the liquidation preference on the class B preferred shares and resulted in an allocation of a larger percentage of future earnings to our class A common shares. This increase was also due to increased valuations of comparable public companies resulting from stronger market conditions. The November 2011 valuation used a WACC of 14.8% and included a discount for lack of marketability of 15%, consistent with that used in July 2011.

        The midpoint of the estimated price range reflected on the cover page of this prospectus, $            , is an increase of $            , or approximately            %, as compared to the estimated fair market value of our common shares as of the date of the latest valuation performed in November 2011 of $5.78. The $            low end of the estimated price range reflected on the cover page of this prospectus is an increase of $            , or approximately            %. The increase is primarily the result of the increased likelihood of consummating this offering, the removal of the prior discounts for lack of marketability and the immediate liquidity available to investors as a result of this offering.

        The assumptions used in determining the fair value of our common shares represent our management's best estimate but are highly subjective and inherently uncertain. If management had made different assumptions, our calculation of the options' fair value and the resulting share-based compensation expense could differ materially from the amounts recognized in our financial statements.

    Revenue Recognition

        We do not account separately for identifiable components of an arrangement if the components are not distinct and separable. Identifiable components of an arrangement are considered separable when the components have stand-alone value, their fair value can be estimated reliably and they do not rely on any other component for essential functionality. The determination of whether a component is separable is judgmental because it requires us to evaluate whether the customer derives value from that component that is not dependent on other identifiable components of the same arrangement. Our evaluation of the fair value of our separately identifiable components also requires the application of judgment as to the sufficiency of the number of stand-alone sales and the proximity of such sales to one another necessary to support fair value. The timing and amount of revenue recognition can vary depending on how these judgments are exercised. For example, software revenue which may otherwise have been recognized up-front is instead recognized ratably over the term of the component on which its value is dependent.

        Connectivity services, activation services and branding services are associated with an indeterminate period, as are certain of our consumer offerings. Estimation of expected terms requires the use of judgment such as estimated technological life, server connection periods and customer relationship periods, as applicable. The timing and amount of revenue recognition can vary depending on how such judgment is exercised. We determine the estimated technological life of our software by taking into consideration such factors as customer usage over time, pricing interdependencies and estimates of the life of hardware and operating systems on which the license will be used. To date, there is no indication that the estimated technological life of the software will change. The determinations of server connection periods and customer relationship periods are based on our evaluation of historical patterns and our expectation of future patterns. Material differences may result in the amount and timing of revenue for any period if we make different judgments or utilize different estimates in the future.

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        Revenue for TeamViewer, our collaboration product, is recognized net of revenue allowance. We estimate the allowance based on historical collections.

    Fair Value of Other Intangible Assets

        We recognize the other identifiable intangible assets at fair value at the date of acquisition of our subsidiaries. In determining the other intangible assets' fair value, we adopt the valuation approach that we determine is most appropriate for the asset being valued, typically the income or replacement cost approach.

        The income approach is used for acquired assets whose value is determined by us to be income generating and for assets that could not be replaced by re-building or purchasing the asset. In adopting the income approach, we use the multi-period excess earnings method or the royalty savings method, depending upon the identified asset. The multi-period excess earnings method values an other intangible asset using the present value of incremental after-tax cash flows attributable only to that other intangible asset. Using this method, the fair value of the other intangible asset is estimated by deducting expected costs, including direct costs, contributory charges and the related income taxes, from expected revenue attributable to that asset to arrive at after-tax cash flows. The contributory asset charges represent the fair returns, charges or economic rents of other assets that contribute to the generation of the expected revenue and are applied on an after-tax basis. The remaining cash flows are then discounted to their present values and totaled to arrive at the fair value of the other intangible asset acquired. The royalty savings method values an other intangible asset at an amount equal to the savings that would result from having ownership of and therefore not paying royalties for the right to use the other intangible asset. Using this method, the fair value of the other intangible asset is estimated by taking the after-tax net royalty savings over the life of the intangible asset as an indication of its value. The remaining cash flows are then discounted to their present values and totaled to arrive at the fair value of the other intangible asset acquired.

        The replacement cost approach is used for acquired other intangible assets that we determine could be replaced by re-building or purchasing the asset. In adopting the replacement cost approach, we estimate the value of the intangible asset by determining the costs associated with re-building or purchasing the asset.

        Determining the fair value of intangible assets acquired requires management's judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash flows, discount rates, asset lives and market multiples. The judgments made in determining the estimated fair value of intangible assets, as well as their useful lives, can significantly impact our financial position and results of operations.

    Other Intangible Assets with Indefinite Useful Life

        We recognize the "TeamViewer" and "VIPRE" brand names as having an indefinite useful life. In determining the useful life of these brands, we have considered the strength of the brands, and any factors which might limit the usefulness of these brands. Furthermore, in determining the useful life of these intangible assets, we consider the strength of our legal title over the assets, and our intention to build upon and to continue using indefinitely these brand names.

        Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually on an individual basis. In addition, the useful lives of the assets are reviewed annually to determine whether the indefinite life continues to be supportable.

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    Impairment of Goodwill and Other Intangible Assets

        We determine whether other intangible assets and goodwill are impaired on at least an annual basis. This requires an estimation of the value-in-use of the cash generating units, or CGUs, to which the other intangible assets and goodwill are allocated. Estimating value-in-use amount requires us to make an estimate of the expected future cash flows from the CGU and also to choose a suitable discount rate in order to calculate the present value of those cash flows. The estimates used to calculate the value-in-use of the CGUs change from year-to-year based on operating results and market conditions. Changes in these estimates and assumptions could materially affect the determination of fair value and impairment for each CGU.

    Fair Value of Deferred Revenue Acquired in Business Combinations

        The fair value of deferred revenue performance obligations acquired in business combinations has been recorded based on the estimated fair value of the obligations on the acquisition date using a cost-based approach. The fair value of the obligation was estimated using the expected costs that we estimated would be necessary for a market participant to fulfill the remaining customer performance obligations and by applying a reasonable profit margin to these costs. We estimated the reasonable profit margin by identifying and reviewing the profit margin of potential market participant companies using information that was available at the time of each acquisition.

    Fair Value Measurement of Contingent Consideration

        Contingent consideration, resulting from business combinations is recognized at fair value at the acquisition date as part of the business combination. The obligation to settle the contingency by the issuance of shares in the Company is classified as equity. In the case of contingent consideration classified as equity, this is not remeasured except when settled by the issue of shares.

        Determining the fair value of contingent consideration as of the acquisition date requires us to make estimates and assumptions, including future cash flows and discount rates and our assessment of relative risk inherent in the associated cash flows. Assumptions may be incomplete or inaccurate, and unanticipated events and circumstances may occur.

    Fair Value of Interest Bearing Loans and Borrowings

        Our interest bearing loans and borrowings are all floating rate liabilities that are carried at amortized cost. On initial recognition and at each financial reporting date, we evaluate the fair value of these instruments on the basis of prevailing market rates of interest and our own credit risk.

    Fair Value of 2011 Convertible Subordinated Promissory Notes

        The fair value of our convertible subordinated promissory notes on initial recognition was calculated based on the present value of future principal and interest cash flows, using a 10% discount rate determined by us to be the applicable market rate of a liability with the same terms and conditions.

    Fair Value of Convertible Preferred Equity Certificates

        In connection with the 2009 acquisition of a controlling interest in the registrant by Insight, we issued convertible preferred equity certificates, or CPECs, to certain of our shareholders and, in connection with the Merger in 2010, the CPECs were converted into shares of the registrant. See "Description of Share Capital—Historical Development of the Share Capital of the Registrant" below for additional information on the issuance and conversion of the CPECs. For the periods during which the CPECs were in existence, we determined that the CPECs had a financial liability component because the terms and conditions of the CPECs contained a contractual obligation to transfer cash or other financial assets to the holders thereof.

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The fair value of the liability component has been determined by reference to the fair value of similar stand-alone debt instruments (including any embedded non-equity derivatives). The amount allocated to the equity component is the residual amount, after deducting the fair value of the financial liability component from the fair value of the entire compound instrument.

        In separating the convertible instrument, the liability component is the present value of the stream of future contractual cash flows discounted at a market rate applicable to similar debt instruments without the embedded derivatives.

        Our best estimate of the period within which the CPECs were to be exited by the holder, if not prepaid by us earlier, was within the first four years of the tenure of the CPECs, on the basis that this is the shareholder's average and expected investment period for typical investments. The cash flows were discounted over the expected period by an appropriate market rate (represented by the Euribor rate plus our credit spread).

    Deferred Income Taxes

        We use the liability method of accounting for income taxes. Under the liability method, deferred taxes are determined based on the temporary differences between the financial statement and tax bases of assets and liabilities, using tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized. This assessment requires management's judgment, estimates and assumptions. In evaluating our ability to utilize our deferred tax assets, we consider all available positive and negative evidence, including the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are recoverable.

        Our judgments regarding future taxable income are based on expectations of market conditions and other facts and circumstances. Any adverse change to the underlying facts or our estimates and assumptions could require that we reduce the carrying amount of our net deferred tax assets.

    Uncertain Tax Positions

        We are required to calculate and pay income taxes in accordance with applicable tax law. The application of tax rules to complex transactions is sometimes open to interpretation, both by us and by the taxation authorities. The tax authorities may challenge the positions we take in determining our current income tax expense and may require further payments. Those interpretations of tax law that are unclear are generally referred to as uncertain tax positions.

        We calculate our current tax assets and liabilities for the current and prior periods at the amount expected to be paid to (or recovered from) the taxation authorities which involves dealing with uncertainties in the application of complex tax laws and regulations in multiple jurisdictions across our global operations. If we determine that it is probable that an outflow of economic resources will occur (i.e., that upon examination of the uncertain tax position by the appropriate tax authority, we will, for example, not be entitled to a particular tax credit or deduction or that a particular income stream will be judged taxable), we record a liability based on our best estimate of the amount of the economic outflow that may occur as a result of the examination of the uncertain tax position by the tax authority. Our best estimate of the amount to be provided is determined by the judgment of management and, in some cases, reports from independent experts.

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    Recent Accounting Pronouncements

        Certain new standards, amendments and interpretations to existing standards have been published but are not yet effective for the current reporting period and which have not been adopted early. None of these standards, interpretations or amendments are expected to have a material impact on our financial position or performance and the Company will not take advantage of the extended transition period provided to emerging growth companies in Securities Act Section 7(a)(2)(B) to comply with newly approved accounting standards.

    Internal Control Over Financial Reporting

        In connection with the audit of our 2008, 2009 and 2010 financial statements which were completed concurrently, our independent registered public accounting firm identified six material weaknesses in our internal control over financial reporting. We concur with this determination. In connection with the audit of our 2011 financial statements, our independent registered public accounting firm determined that three of these material weaknesses remained. We agree with this determination. As a result of our remaining material weaknesses, our management cannot certify with reasonable assurance that our internal controls over financial reporting are effective. As discussed in more detail below, we have successfully remediated certain of our historical material weaknesses.

        A material weakness is a deficiency, or combination of deficiencies, in a company's internal control over financial reporting such that there is a reasonable possibility that a material misstatement of that company's annual or interim financial statements will not be prevented or detected on a timely basis. The six material weaknesses identified in connection with the audit of our 2008, 2009 and 2010 financial statements were as follows:

    Business Combination Accounting.  Our controls over our accounting for, and financial reporting of, business combinations, including allocation of purchase consideration to the fair value of acquired assets and assumed liabilities and recognition of related amortization and deferred taxes were not effective.

    Share-Based Compensation Accounting.  Our controls over our accounting for, and financial reporting of, share-based compensation transactions and related fair value computations were not effective.

    Accounting for Non-Routine Financing Transactions.  Our controls over our accounting for, and financial reporting of, non-routine financing transactions were not effective. As a result, we were unable to prevent or detect improper accounting for transaction costs and modifications to our debt agreements.

    Revenue Recognition.  Our controls over our accounting for, and financial reporting of, revenue recognition, including (i) accounting for arrangements with multiple components including fair value determinations, (ii) consistently applying the proper revenue recognition accounting guidance and (iii) administering and accounting for varied, high volume transaction types, were not effective.