Hi-tech sector back in Focus in the City

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The Independent Online

Micro Focus a Newbury-based technology company, is to become the first large software company to float on the London Stock Exchange since the technology bubble burst in 2000.

It is being brought to the market by UBS and Goldman Sachs and is expected to be worth between £300m and £400m. It has appointed Kevin Loosemore as its non-executive chairman. He recently left his post as Cable & Wireless's chief operating officer after Francesco Caio, the C&W chief executive, took a more direct grip on the UK operations.

Micro Focus's management and employees own 12 per cent of the group while 80 per cent is owned by the San Francisco-based private equity fund Golden Gate Capital. A further 8 per cent is owned by Parallax Capital Partners.

The group's software enables companies to reuse their existing IT systems for new applications without having to replace them.

Figures published yesterday by the group showed that in the nine months to 31 January it increased sales 20.4 per cent, from $91.7m (£48.44m) to $110.5m, with earnings up from $23.1m to $35.7m. The new cash from the float is likely to be used to pay down its $110m debt.

Although the six technology floats on the main London market since the crash have performed well, the City has appeared nervous of the software sector. Marlborough Stirling was the last sizeable company to float and it was taken over for £95.3m last month.