Spectel, an Irish firm which develops software to allow companies to hold conferences over computer networks, said yesterday it would raise €46.2 million from a public flotation on the Irish and London stock exchanges.
The offering - the first in Dublin since a severe downturn hit the sector in 2001 - will net €20 million for the company's chief executive, Mr Gerard Moore (41). Enterprise Ireland and Quinn Direct Insurance are among the institutional shareholders which will benefit from the flotation, which will value Spectel at €222 million.
Analysts said yesterday the initial public offering was good news for the Irish IT sector, but warned it was unlikely to lead to a rash of public flotations later this year. "It is not the most receptive time for technology offerings," said Mr John Coolican, analyst with Merrion Stockbrokers. "It will be a testament to the management if it proves successful."
Spectel, which is being advised by Schroder Salomon Smith Barney and NCB Stockbrokers, starts an investor roadshow this week and plans to launch its shares on the "grey market" from May 8th. Official dealing is expected to begin on May 13th.
The firm has set a price range for its shares between €3.05 to €3.65 and it will offer 39.3 per cent of the company's equity in the share placing. This amounts to an offer of 10,447,761 existing shares and 15,522,388 new shares.
Mr Moore, who led a management buyout at Spectel in 1996 at a cost of less than €1 million, owns 51 per cent. He will reduce this to 29.4 per cent, netting €20 million in the process. Following the IPO process, he will not be able to sell shares for 12 months. Other directors will have a six-month lock-in period.
NCB and Powerscourt Nominees own about 30 per cent of the firm on behalf of clients. Bank of Ireland Nominees, insurance group FBD and Quinn Direct together own about 19 per cent, and Enterprise Ireland owns the remaining 1 per cent of Spectel.
Spectel's offer document shows the firm made a pre-tax profit of €5 million on revenues of €47.4 million in the year to December 31st, 2001. The firm had cash reserves of about €10.1 million at March 31st, 2002. Spectel boosted its revenues and profit considerably in 2001 due to the acquisition of the US firm, Multilink, for $26 million. Multilink had developed and sold two conferencing platforms, which Spectel now sells to customers.
The offer document says Spectel will use the proceeds from the flotation to pursue acquisitions to acquire new technologies and market share. It may also use the proceeds to expand its sales and marketing efforts, fund R&D and repay existing borrowings.
Spectel's products provide conferencing service providers and corporate firms with a broad range of integrated voice, data and web-enabled conferencing facilities. These enable firms to reduce costs by communicating remotely rather than making executives travel to meetings. The sector received a significant boost following the terrorist attacks on September 11th when some firms reduced executive travel.
About 240 staff work for Spectel, which has offices in the US but has its headquarters in Dublin. Employees will share stock options worth about €6 million initially and further options will be granted later.
Analysts said last night the flotation was good news for the IT sector in the Republic and illustrated that firms needed to focus on profit before floating now.
But investors will be extremely nervous about investing in technology firms, following the collapse in the share price of several of the most prominent Irish firms.
