Horizon raises £23m in market

Horizon Technology, whose shares have soared since it floated on the Dublin and London markets in early December, has taken advantage of the strength of the share price to raise €29.3 million (£23 million) in a share placing.

The funds will be used to grow the group's Internet and knowledge services business, including possible acquisitions.

The 2.9 million shares were placed at €10.10 each, and it is understood that about 80 per cent of the new shares were taken up by overseas institutions. Davy Stockbrokers handled the sale of the shares to European investors, with NCB looking after the Irish and British end of the fundraising.

Horizon finance director Mr Charles Garvey said that the money raised would be used to fund growth, mainly in the Internet services part of Horizon's business. "We see quite a few opportunities and there are some acquisition opportunities we are looking at. We wanted to make sure that we're adequately prepared," he said.

The placing - equivalent to 5 per cent of the existing equity - will also go some of the way towards improving liquidity in Horizon's shares. After the placing, the holding of chief executive Mr Samir Naji will be diluted from 58 per cent to just over 55 per cent.

Horizon's ability to place the 2.9 million shares at a discount of less than 6 per cent to the previous market price of €10.70 is an indication of the demand for technology stocks, particularly those with Internet businesses. While Horizon is not a pure Internet firm - it is also involved in distribution and knowledge services - its shares have soared since the December flotation, and particularly in the past few weeks.

Horizon was floated at €1.64 a share in early December 1999 and by the end of 1999 had reached €4.10. But since mid-January, as dot.com fever drove Internet stocks to extraordinary levels, Horizon shares have soared and hit a high of €11.35 two weeks ago before profit-taking brought them back 10 per cent.

But despite the dilutionary effect of yesterday's placing, Horizon shares resumed their upward climb yesterday, with investors betting that the group would use the €29 million for earnings-enhancing acquisitions. From the €10.10 placing price, the shares jumped to a closing level of €11.25, valuing the group at €688 million and Mr Naji's stake at €378 million.