High-end system reseller Morse Holdings finally announced last weekdelay from 1998. its intention to seek a listing on the UK Stock Exchange after it was rumoured to happen last year.
The float is expected to value the reseller at about #350 million and will take place by early summer. Morse was understood to be planning to go public during the second half of 1998 a move that was apparently deferred when IT stocks weakened later in the year (PC Dealer, 14 October 1999).
But company officials claimed this week that they have never officially announced a timescale for the float and described the suggestion that they had initially hoped for a float value of #600 million as 'pure speculation'.
The size of the IPO will be #200 million, with #130 million to be shared among existing shareholders and #70 million to be used to fund further expansion in Europe and pay off debts resulting from an MBO in September 1995.
Morse has already established operations in Germany and plans to increase its coverage this year to include several other significant European countries, according to Mark Byatt, marketing director of Morse.
He declined to comment on whether that will involve acquisitions, but said Morse was wary of growing too rapidly.
'We will only be opening in sectors we feel are appropriate because we don't want to spread ourselves too thinly,' Byatt added. 'Our business model has always been about focusing on a small number of things and doing them well.'
The Morse float will only be open to institutional investors. Of the existing shareholders, Morse's directors, who hold 12 per cent of existing shares, and senior management, who hold six per cent, have each declared they intend to sell about 25 per cent of their stakes.
The other Morse shareholders are venture capitalist firms 3i and PPM, who hold 55 per cent and 20 per cent respectively; two former Morse managers who hold five per cent between them; and Morse staff who hold two per cent.
Roger Phillips, analyst at Granville Equity Research, believed Morse would be one of the first of a wave of IT companies to announce IPOs between now and June.
'On the back of generally strong reporting from IT firms over the past couple of months that should settle some frayed City nerves, there is likely to be a gold rush of IT companies listing on the Stock Exchange in the second quarter.
'It's going to be a buoyant time for IT firms, which will focus investor attention on the sector in the same way that the focus in first six months in 1998 also led to flood of IPOs,' he added.
Phillips said investors will find Morse an attractive investment because its business is likely to maintain good results long term: 'Morse has high margins for a reseller and its relationship with Sun Microsystems is also a strength.
'Unlike other listed firms, such as Compucenter and Compel, that are often in competition with other vendors to provide services, Sun has made no play for that market, which also makes Morse's business more credible.'
Struggling security titan makes three board appointments after investor took 5.8 per cent stake last month
Commvault ousted its CEO in May and has since undergone a radical refocus
As employees demand more flexible working environments, CRN asks how the channel is adapting to the changing working landscape
Wall Street less than impressed with Oracle's growth as cloud numbers remain hidden