Computer group heading for market with pounds 200m price-tag
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Your support makes all the difference.MCDONNELL Douglas Information Systems, the UK computer company formed through a management buyout in March, is expected to float on the Stock Exchange early next year. City analysts say the company, which has a turnover of pounds 160m, is likely to be valued at between pounds 100m and pounds 200m.
MDIS was formerly part of McDonnell Douglas, the US defence and aerospace group, which bought it in 1979. Since 1990, the computer arm has kept separate accounts. Despite the downturn in the computer market, the company has consistently increased earnings.
Operating profits last year were pounds 19m. For the first half of this year, the company has announced profits of pounds 8m. Baring Brothers and NatWest Wood Mackenzie have been appointed as financial advisers and brokers respectively with a view to listing the shares.
Jeremy Causley, MDIS's chief executive, said: 'We are going to go ahead with the flotation. The timing is the best it has ever been in terms of the success of the business.'
Mr Causley said the key to the company's success was a decision in the 1980s to abandon the manufacture of hardware - buying that in from Motorola and other suppliers - to focus on designing and developing software and services for niche markets.
MDIS is now one of the largest UK suppliers of computer systems to hospitals, the police and local government. More than two-thirds of the revenues come from the UK, but Mr Causley said one aim of the flotation was global growth.
He said the company had struggled to compete in its old territory with huge computer groups such as IBM. 'When it comes to software, it is all about brains, and the brains in this country are as good and as cost- effective as anywhere in the world,' he said.
MDIS employs 1,700 people, of which 1,200 are in Britain. The company also develops software in North America, Australia and Germany.
The largest shareholder is Baring Capital Investors. Sixteen MDIS managers also hold stakes. However, the company has always declined to be specific about shareholdings or the financing for the management buyout, thought to have had a price tag of around pounds 150m.
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