Wednesday, 24 October 2007

Telecity defies the odds and pulls off IPO

Yesterday the Times headline screamed Wary investors desert London IPOs with news of a substantial drop in the the number of companies listing on the LSE and AIM in Q3. Indeed, in our own sector, we had seen SmartStream pull its own IPO - although we now suspect they had more fundamental problems with the valuation they expected.

So today's news of Telecity's debut on AIM at 220p valuing the company at £436m and raising £96.3m (albeit a bit down on the £125m initially expected) is surely good news for the whole UK tech sector. Telecity is a Manchester data centre operator - a spin out from Manchester University backed initially by 3i and Oak Hill. Half year revenues of £46.1m and underlying profits of £10.3m imply a reasonable ebitda multiple of c12 on 2008 earnings.

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