ClearStream will raise up to €7m in AIM float

A Wexford medical devices company plans to float on London's Alternative Investment Market next month, raising up to €7 million. Dominic Coyle reports.

ClearStream Technologies, which manufactures stents and the catheters to deliver them within the human body in surgical procedures, will use the cash to accelerate product development and extend its distribution channels.

ClearStream specialises in the design of stent delivery systems - fine wire tubes or catheters that allow surgeons position the stents which expand to unblock clogged arteries in angioplasty and similar procedures. It also manufactures stents. However, the sector has been revolutionised by the introduction of drug eluded stents, which are considered safer and more effective.

ClearStream is developing a drug eluding stent and hopes it will help it grab a larger slice of the $2.5-$3.5 billion market dominated by Boston Scientific that is expected to grow to between $8 billion and $10 billion by 2006.

"The existing investors put in money in the last 12 months to allow us continue R&D," said managing director Mr Andy Jones. "The funds raised in this flotation will allow us accelerate that process and get our pipeline products to market."

Patent issues will preclude ClearStream from selling some of its key products in the United States, which accounts for about half of the total market. But the company argues there is plenty of room for growth in other markets.

It also markets a bare metal stent that it says is still favoured by some "cost-conscious" European health authorities.

The company, which employs 106 people at its premises in Enniscorthy, was bought by its management in July 2000 from parent group AngioDynamics for about €4 million.

It is expected to be valued between €11-€15 million at the time of the flotation, before any money raised in the initial public offering - between €5.5-€7 million.

The six executives, who formed the MBO team, together with one other who joined the company immediately after, currently share a 57 per cent stake in the company. ICC Venture Capital and Alliance Investment Capital share 34 per cent. Enterprise Ireland holds about 3 per cent. The rest is held by staff, members of the company's clinical advisory panel and its financial advisers.

The largest individual investors are Mr Jones and finance director Ms Gay Gahan, who each own about 17 per cent of the group. Following the AIM float, they will each be worth about €2.5 million on paper.

None of the current investors are selling shares in the flotation process and both management and the two venture capital investors have agreed to a lock-in period that will see them unable to sell shares until publications of results for the six months to January 2006 - roughly 18 months after the flotation.