Regional UK operator Manx Telecom is looking to raise £156.3m from its flotation on the London Stock Exchange’s AIM market.
Private equity firms Hg Capital and CPS Partners, which together own 90% of the Isle of Man incumbent, will sell all of their…
Regional UK operator Manx Telecom is looking to raise £156.3m from its flotation on the London Stock Exchange’s AIM market.
Private equity firms Hg Capital and CPS Partners, which together own 90% of the Isle of Man incumbent, will sell all of their shares in the telco at the placing price of £1.42 per share, to generate £67.2m.
Meanwhile Manx will issue 62.7 million new shares that are expected to sell for a total of £89.2m, following a successful institutional placing which the operator said was significantly oversubscribed.
The company expects to have a market capitalisation of £160.2m after the flotation completes – expected to be on Monday – with a free float of 98%. The remaining stock will be held by the operator’s management.
In a statement Manx said it would use proceeds from the placement, together with funding from a new facility agreement, “for the repayment of all outstanding senior debt and loan notes, ensuring a strong balance sheet structure to support the future growth of the business”.
Liberum Capital is Manx’s nominated adviser, corporate broker and is underwriting the IPO. It is also advising Hg Capital. Oakley Capital is acting as a financial adviser to Manx and Linklaters are providing legal advice to Hg.
The listing follows that of small network operator CityFibre, which generated £16.5m (US$27m) last month when it floated on the AIM. That IPO was also managed by Liberum.
Hg and CPS bought Manx for an enterprise value of £158.8m from Spanish giant Telefonica in June 2010. The companies did not disclose how much debt Manx now holds. However Hg, which controls 80% of the business, said that the overall investment represented a multiple of 2.1 times what it paid for the telco and a gross internal rate of return of 26% for its clients.
Manx’s CEO Mike Dee said he was pleased with the level of interest from institutional investors and noted the company would now look to push on with its growth strategy.
“The business is well-placed to take advantage of further on-island growth opportunities due principally to demand for 4G, faster broadband and data hosting services. Expansion will also be driven by growth in off-island services based on Manx Telecom’s mobile technology platform.”
