Technology IPOs - Increased options for UK companies
14 February 2013
With the launch of the London Stock Exchange’s High Growth Segment in March, UK technology companies of all sizes now have a domestic listing opportunity to suit their needs. The High Growth Segment was launched to appeal to technology and other high growth companies that want to list in London but may not wish to apply for a Premium Listing (be it for eligibility or regulatory reasons) but would like an alternative to AIM, the London Stock Exchange’s junior market.
There is a popular belief that the UK capital markets are not supportive of technology companies and that there has been a flight of UK technology companies to list in the US. However, analysis by Deloitte highlights that no UK technology companies have listed in the US in the past three years; whereas during the same period over 30 UK technology companies listed on AIM. Smaller UK technology companies have already recognised the appeal of listing in London rather than in the US.
John Hammond, equity capital markets partner at Deloitte, said: “Our analysis shows that smaller UK technology companies have, for some while, been choosing London rather than the US as their preferred listing destination. AIM has been doing its job as an incubator for UK companies. What is exciting about the launch of the High Growth Segment is that larger UK technology and other high growth companies now have a real alternative to a Premium listing or joining AIM and that can only be a good thing for London.”
UK technology companies have largely sought growth funding from the debt markets or from private equity. The High Growth Segment offers a real funding alternative to larger cap tech companies.
Hammond adds: “Debt markets have been constrained and are expensive to tap, particularly in Europe following the banking crisis. Many companies have been forced to look to their own balance sheets for expansion capital. Other UK tech business owners have turned to private equity investors for finance, though of course, they have had to cede some control of their business in doing so. The High Growth Segment should create a more level playing field and make the UK tech sector more competitive globally.
Note to editors
We have reviewed all technology listings on NYSE, Nasdaq, LSE (Main) and AIM markets from the beginning of 2010 to date, based on publically available information.
Companies with a primary category of ‘Technology’ in the UK and ‘TMT’ in the US Technology stocks are included according to their categorisation by the relevant listing authority. Media and entertainment stocks are included where there is an obvious technology focus to their business.
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.
Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.
The information contained in this press release is correct at the time of going to press.
Member of Deloitte Touche Tohmatsu Limited.