Tech Barometer: AIM Technology companies on AIM raise over 1.2 billion in 2017 February 2018 www.moorestephens.co.uk PRECISE. PROVEN. PERFORMANCE.
Tech Barometer: AIM Technology companies on AIM raise over 1.2 billion in 2017 Introduction The average enterprise value of a technology company on the Alternative Investment Market (AIM) at 31 December 2017 was 111m a 24.9% increase from 30 June 2017, and a 50% increase in the year. The increase in value in the last six months has been driven by all sub-sectors, with hardware companies increasing by 16% (56% in the last year), support services 56% (89% in the last year) and software by 20% (42% in the last year). This compares with the FTSE AIM All-share index increasing by 24% in the last year and the FTSE All-Share index by 9%. Dougie Hunter, Director at Moore Stephens, comments Over 1.2bn has been raised by technology companies on AIM in 2017 this is four times as much as 2016. The majority of funds have been raised from secondary issues ( 1.1bn) but there are encouraging signs on the IPO side with seven in the second half of 2017, compared with just one in the first six months of the year. There is no doubt that the ability of companies to raise significant levels of secondary funds has been one of the factors for the increase in the number of technology IPOs. Another, is the prices that have been paid with values of technology companies on AIM increasing by nearly 25% in the last six months and 50% compared with the start of the year. Technology companies will likely continue to be attracted to AIM in 2018 although it is unlikely that the sector can generate the same overall increase in values as seen in 2017. The infographic overleaf summarises our detailed research into the activities of technology companies trading on the AIM in the six months ended 31 December 2017. Key findings There were seven tech IPOs on AIM, raising 114m, in the six-month period to 31 December 2017 compared with only one in the first half of the year. Over 810m was raised from secondary fundraisings in the six-month period to 31 December 2017 this was more than in the previous two years combined and includes the five largest individual company fundraises since 2015. An increase in revenue valuation multiple to 2.33x. An increase in the overall EV/EBITDA valuation multiple to 13.6 with a significant increase in electronics companies to 15.1. The number of technology companies on AIM has increased from 166 to 168 with IPOs outnumbering delistings and acquisitions.
Technology companies on AIM six months ended 31 December 2017 IPOs 7 Secondary fundraisings 33 810m Raised in six months ended 31 December 2017 202m 114m Raised in six months ended 31 December 2017 150m 95m 75m
Technology companies on AIM six months ended 31 December 2017 Enterprise values (EV) 111m* EV/revenue multiples 2.33* 24.9% 2.72x Increase in six months ended 31 December 2017 20% 2.49x 16% 56% Support services *Average Telecoms Support services 2.57x 1.75x *Median
Technology companies on AIM six months ended 31 December 2017 EV/EBITDA multiples 13.6* 2.25% Increase in six months ended 31 December 2017 Electronics Support services Telecoms 13.8 12.9 15.1 10.8 12.5 * Median based on latest available financials to 31 December 2017 and companies with positive EBITDA. AIM tech companies 87 14 10 Telecoms 18 Electronics 24 Support services 15 Other
Case study: Our work with ICSA Boardroom Apps Limited The Moore Stephens Corporate Finance team has advised the Institute of Chartered Secretaries and Administrators (ICSA) on the sale of its majority shareholding in ICSA Boardroom Apps Limited, owner of BoardPad one of the leading board collaboration software products, to Diligent Corporation. Moore Stephens acted as the exclusive financial adviser to ICSA, providing potential sale options and leading subsequent negotiations. Following agreement of terms with Diligent, Moore Stephens worked alongside all parties and their advisors, managing the transaction through to completion. This was a quality performance by the Moore Stephens M&A team, including Ish Alg, Brian Keane and Chris French, for which ICSA is profoundly grateful. Simon Osborne FCIS, Chief Executive, ICSA
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