Sanderson prepares for £20.2m market debut

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The Independent Online

The software company Sanderson Group is expected to join AIM this week. It has raised £14m by placing 27.7 million shares at 50p a share,giving it a market value of £20.2m.

The software company Sanderson Group is expected to join AIM this week. It has raised £14m by placing 27.7 million shares at 50p a share,giving it a market value of £20.2m.

The group, which is likely to start trading on Thursday, provides software and support services to small companies, targeting four markets: manufacturing, food, mail order and wholesale distribution.

Five years ago it was taken private in a management buyout backed by Alchemy Partners for £114m, before the technology bubble burst. Since then the business has been restructured into three arms. Civica floated this year for £70m, Sanderson is the second, and the third, Talgentra, is owned by Alchemy.

Of the £14m raised, £8m will go to Alchemy and co-investors, with Sanderson getting the rest. This will give Alchemy a 28 per cent stake while the management will control about 9 per cent after buying more shares in the placing.

Sanderson said it would use the money raised to pay off debts. It hopes the flotation on London's junior market will put it in a "strong position" to make acquisitions. Its markets are serviced by a large number of suppliers, many of which it believes are run inefficiently.

Despite weak demand for software in Britain, Sanderson said it had delivered steady revenue and continued profit growthover the past two years. Operating profits before exceptional items and goodwill rose from £1.2m in 2002 to £2.8m this year. Since the end of the financial year on 30 September, it has traded in line with expectations and said it was confident about the remainder of the year.

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