It is set to be a busy week on AIM, with at least two companies expected move ahead with flotation plans. Waterlogic, which is expected to publish its admission document this week, has already raised £40m in new money via an institutional placing. That puts it on track for a market value of about £112m when it lists later this month.
The company makes water dispensers, or purifiers, for offices, factories, hotels and other workplaces. Such machines usually work with plastic tanks filled with drinking water that need to be replaced at regular intervals.
What sets Waterlogic apart is that its dispensers connect straight to the mains water supply, doing away with the need for refills. In industry jargon, they are called "point of use" dispensers (POU), as opposed to the "bottled water-cooler" variety.
Part of the money raised via the listing will go towards funding the expansion of the company's manufacturing facilities in China. Waterlogic Qingdao Manufacturing, as the wholly owned venture is known, runs a factory in Qingdao on the country's eastern coast. The facility is about and hour's flight from Shanghai or Beijing, and employs some 200 staff that make the entire range of Waterlogic dispensers. The remainder of the funds will go towards things such as financing future acquisitions, the development of the company's Firewall UV purification technology and repaying loans.
The market appears to be a lucrative one. Back in 2009, the business consumer POU market in the US and Europe was worth a massive $2bn, according to the company, which reckons that the figure has continued to expand over the past two years.
The company's own performance has also been good, with Waterlogic generating revenues of more than $68m and boasting an installed base of about 500,000 installed machines at the end of last year.
It has an enviable reach, with its products sold in North and South America, and across Europe. It also sells in Asia, Australia and in Africa. Of these, the key markets are the US, where Waterlogic boasts a 22 per cent market share, and the UK, Denmark, Norway, Germany and France.
Institutional support has been pretty strong, with the placing believed to be have oversubscribed by more than two times. "There has been a great deal of interest from investors in Waterlogic," the chief executive Jeremy Ben-David said, adding: "Our IPO signifies the start of the next major phase of development of Waterlogic, providing us with the financial flexibility to capitalise further and thrive upon the attractive long-term growth opportunities throughout our business with a view to achieving further sustainable, profitable growth."
Spectra readies for public life
Spectra Systems, a specialist in technology that comes in handy in authenticating banknotes and other products, will unveil its intention to float today.
Based in the US, the business was founded back in 1996 by its chief executive, Dr Nabil Lawandy, who at the time was a professor at Brown. The company began with some intellectual property from the university and today has a roster of customers including a central bank from a G8 country and Crane & Co, which has been supplying the US Treasury with currency paper for well over a hundred years.
It also serves another 14 central banks, albeit indirectly, via one of the world's largest commercial security printers and paper manufacturers, which happens to be a Spectra customer.
The business produces both software and hardware products, which include high-speed currency authentication sensors that central banks install in their processing machines; the kit is powerful, with the capability to authenticate notes at rates of up to 40 per second.
Spectra also makes quality-control equipment and consumable materials such as particles, threads and inks and coatings, all of which feature signatures and codes used for authentication.
Beyond the banknote market, Spectra has made forays into the market for verifying and tracking pharmaceutical goods, branded luxury items and other products. Looking ahead, Spectra said it is in the process of commercialising a new security feature which has already been evaluated by a G8 central bank. The unidentified institution has contracted the business to develop sensors to identify the new feature along with existing ones, boding well for the innovation.
Additionally, Spectra, in conjunction with a UK firm, is talking to the Reserve Bank of India about a new-generation feature. The talks have been "through two rounds of elimination", the company said, and are expected to come to a conclusion this year. Interestingly, the features are custom-made to fit the needs of each customer, adding to Spectra's attraction.
"We are excited about floating the company on a market which is located in the centre of the world's economy," Mr Lawandy said.
"Our growth and increased shareholder value are based on the continued adoption of our products by central banks regulating the economies of key G20 countries. AIM is positioned to give us the visibility to accelerate this process."