Tech Barometer: AIM Enterprise values of technology companies on AIM accelerate in the year since the Brexit decision July 2017 www.moorestephens.co.uk PRECISE. PROVEN. PERFORMANCE.
Tech Barometer: AIM Enterprise values of technology companies on AIM accelerate in the year since the Brexit decision Introduction The average enterprise value of a technology company on the Alternative Investment Market (AIM) at 30 June 2017 was 88.9m a 21.3% increase from 31 December 2016, and a 51% increase since the Brexit decision in June 2016. The increase in value in the last six months has been driven by all sub-sectors with hardware companies increasing by 35% (83% in the last year), support services 21% (57% in the last year) and software by 20% (49% in the last year). This compares with the FTSE AIM All-Share Index increasing by 36% in the last year and the FTSE All-Share Index by 14%. Dougie Hunter, Associate Director at Moore Stephens, commented: The increase in the value of technology companies on AIM in the last year has far exceeded the performance of all UK share indices. This clearly shows that investors are expecting tech companies on AIM the majority of which are UK based to grow as a result of earning opportunities from the weaker pound rather than just benefiting from reporting international earnings. Although there has been a limited number of tech IPOs on AIM since the Brexit decision in June 2016, the increase in value of the tech companies that are listed, as well as the significant level of secondary fundraising that has been achieved, should encourage more tech IPOs in the second half of 2017. The infographic overleaf summarises our detailed research into the activities of technology companies trading on the AIM in the six months. Key findings include: there was only one tech IPO on AIM in the six month period (Ethernity Networks) compared with eight in 2016 and seven in 2015; over 275m was raised from secondary fundraisings in the six month period to 30 June 2017 this was more than the whole of 2016 ( 224m) and includes the three largest individual company fundraises since 2015; an increase in overall revenue valuation multiple to over 2x for the first time; an increase in the overall EV/EBITDA valuation multiple to 13.3 with a significant increase in hardware companies and support services, although still behind software companies; the number of technology companies on AIM has decreased from 169 to 166 following a number of delistings and acquisitions.
Technology companies on AIM six months IPOs 1 Secondary fundraisings 44 275m Raised in six months 58m 47m 15.0m Raised in six months 39m 21m
Technology companies on AIM six months Enterprise values (EV) 88.9m* EV/revenue multiples 2.06* 21.3% 2.81x Increase in six months 20% Software Software Hardware 2.49x 35% Hardware 21% Support services *Average Telecoms Support services 2.56x 1.14x *Median
Technology companies on AIM six months EV/EBITDA multiples 13.3* 22.0% Increase in six months 11.8 Software 14.4 9.9 Hardware 9.7 Electronics 7.0 Support Services 12.4 Telecoms 13.8 11.3 11.1 12.7 * Median based on latest available financials from 1 Jan 2017 to 30 June 2017 and companies with positive EBITDA. AIM tech companies 89 Software 14 Hardware 11 Telecoms 18 Electronics 22 Support services 12 Other
Our work with ICSA Software International Limited The Moore Stephens Corporate Finance team advised the Institute of Chartered Secretaries and Administrators (ICSA) on the sale of its subsidiary, ICSA Software International Limited, owner of Blueprint Oneworld, a market leader in statutory compliance technology to Diligent Corporation. Moore Stephens acted as the exclusive financial adviser to ICSA, providing potential sale options and leading subsequent negotiations. Following agreement of terms with Diligent, Moore Stephens worked alongside all parties and their advisors, managing the transaction through to completion. It was a pleasure to work with the Moore Stephens team. The service level and quality were consistently high. When the deal took unexpected turns the client reassurance was prompt, thoughtful and always calm. Simon Osborne FCIS, Chief Executive, ICSA
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