Virtuality heads for market: Placing will value virtual reality leader at pounds 44m

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The Independent Online
VIRTUALITY, whose space-age virtual reality games systems are becoming a youth craze, is coming to the market via a placing of shares at 170p, valuing the company at pounds 44.4m.

Motorola, the US chip maker, is taking 3.8 per cent and the computer giant IBM 2.2 per cent. Virtuality produces equipment and software enabling someone wearing a headset to experience a computer- generated three-dimensional environment.

The company, founded in 1987 by Jon Waldern, a computer graduate researching VR technology, dominates the world market for VR systems. Virtuality has sold more than 350 of its pounds 25,000 systems to amusement arcades and theme parks worldwide. And it has signed an agreement to develop VR games for Sega, the giant Japanese computer games company.

The placing will raise pounds 9.45m, net of expenses, to finance product development and redeem preference shares. Just over 50 per cent of the company is held by Apax, the venture capital fund, and 12 per cent by the directors.

The company made a small profit in the six months to 30 June, but heavy development costs in the second half mean the forecast for the year-end is a pounds 400,000 loss. No dividend is expected 'during the initial period of the company's growth'.

About 75 per cent of the technology is used for entertainment purposes, though it has commercial and medical applications. A hospital in Italy is experimenting with VR for rehabilitation exercises.

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