The flotation of Dyno-Rod was in the balance yesterday after its proposed new management team failed to raise enough money to buy the drain-clearing company from its American founder.
Jim Zockoll, the former pilot who set up the business in 1963, has told the team his price is non-negotiable, even though they are believed to have access to £59.5m from banks and potential equity investors, £1m shy of the agreed price. Dyno Group, which plans to buy the Dyno businesses from Mr Zockoll, had been expected to make its market debut yesterday, but this was postponed during a day of meetings with the company's broker, Seymour Pierce.
Kevin Mahoney, the former British Gas executive who is to be chief executive of Dyno Group, said the flotation was "far from dead in the water" and it was exploring other options for raising Mr Zockoll's price.
After six weeks of meetings with City institutions, Dyno Group has fallen short of raising its target of £48m in equity investment.
Mr Zockoll and his family stand to pocket £50m if the sale goes through, with a further £10m being split among more than 20 former pilots, stewardesses and mechanics who were his colleagues at Pan Am. He plans to reinvest much of the proceeds in a new venture being run by his son. This is a company called Phonenames, which creates phone numbers based on words made up from the letters on phone keypads.
Dyno-Rod was founded in south London when Mr Zockoll saw the opportunity to introduce electromechanical machines for unblocking drains into the UK. He flew the first equipment over from the US.
It has since expanded into plumbing, locksmithing and rat-catching, with 167 franchisees generating £4.5m of earnings, before interest and tax, for the firm.
Talks over the sale of the company have foundered before, and it was strongly rumoured that Collins Stewart, the broker, considered an accelerated IPO of the business last year.
Mr Zockoll, 74, said last month: "I have been ready to go for the last few years but, although I have had a few approaches, no one has been able to raise the money until now."
The flotation has been put back until at least next week. The company plans to list on AIM before moving to the main market.Reuse content