Planned flotation will value MDIS at 250m pounds
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.THE PLANNED flotation of McDonnell Information Systems, the UK computer group formed last year through a management buyout from McDonnell Douglas of the US, will value the company at pounds 250m.
The share offer and placing, which is underwritten by Baring Brothers, the merchant bank, will raise pounds 107m of new equity. A further pounds 80m is expected to be raised through the sale of shares by existing shareholders.
MDIS has become one of the largest British-owned technology companies, focusing on niche markets including local government, police, health and finance. Jerry Causley, chief executive, said he believed the listing would benefit both the balance sheet and the company's credibility in expanding its public sector customer base.
'I believe we have not been asked to tender for some major contracts because we are seen as a heavily leveraged MBO,' Mr Causley said. He said the proceeds from the flotation would clear the company's debt and allow it to direct more of its resources into research and development.
Launching the pathfinder prospectus yesterday, Mr Causley said MDIS made an operating profit last year of pounds 22.3m, compared with pounds 19.1m in 1992. Turnover fell to pounds 148.5m from pounds 158.6m the previous year and expenditure on research and development rose to pounds 17.6m from pounds 15.1m.
'Against a background of world recession, we have achieved a trading record of year-on-year increases in operating profit over the past three years. This is good foundation for our flotation,' Mr Causley said.
The company was founded in the UK in 1969 and was taken over by McDonnell Douglas 10 years later. The US aerospace group subsequently decided to focus on its core business. The management owns 15.5 per cent of the company and is expected to retain a substantial stake after the flotation.
MDIS employs almost 1,700 people around the world, including 1,245 in the UK. Almost 30 per cent of revenues come from overseas and about 60 per cent from the public sector.
The company no longer manufacturers computers but supplies its own software packaged with computers and networks bought from other suppliers. The margins in this market are around 15 per cent, which is significantly higher than in computer manufacturing.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments