US video firm chooses 'cheaper' AIM over Nasdaq

Click to follow
The Independent Online

Wire One, an American video-conferencing company, has spurned the US technology index Nasdaq and will instead list its shares on the Alternative Investment Market in London.

The company argued that it is cheaper to list in the UK than the US because of ongoing costs related to complying with Sarbanes-Oxley regulations.

It also said it believes listing on AIM will help fundraising in the future as it looks to increase its presence in Europe.

Leo Flotron, Wire One's president, said: "We feel that listing on AIM will help achieve our goals. AIM is a market for entrepreneurial businesses."

Wire One, which is owned by the US private-equity company Gores Group, is looking to raise $26m (£14m) to pay down debt of more than $40m. Mr Flotron also said the listing will give it access to shares which can be used when acquiring European companies.

The company is looking to consolidate the fragmented European market. Mr Flotron said the company's multinational clients want a one-stop shop for video-conferencing services across Europe and that Wire One will initially look to purchase companies in major European markets such as the UK, France and Germany.

"We have an opportunity to create a dominant player in Europe," Mr Flotron said.

The flotation of the business is expected to value the company at about £60m, with Gores retaining a minority stake. Wire One is already a profitable and cash-generative business. The listing will take place at the end of June, with Evolution Securities acting as broker.

Frost & Sullivan, a research group, estimates that the video-conferencing market will be worth $3.24bn by 2010 on a global basis.

Wire One anticipates that growth in the European video-conferencing market will be the fastest in the world during this year.

Comments