Horizon to limit scope for outside investors

Horizon Technology Group has announced details of plans to take a public listing on the Dublin and London markets. The group expects to begin trading on both exchanges in early December.

In an unusual move, the company will place just 5 per cent of its equity with institutional and private investors. On top of equity already held by outside investors, this will bring its free float to 25 per cent, the minimum amount required under Irish Stock Exchange requirements.

Based on peer group comparisons conducted by financial adviser, NCB, which has valued the company at £90 million (€113 million), Horizon stands to make £4.5 million from the issue of 2.9 million shares.

The sole beneficiary will be Mr Samir Naji, Horizon founder and chief executive, who is diluting his 67 per cent shareholding to 62 per cent.

In addition, Horizon employees will be offered an opportunity to purchase shares amounting to around 2.75 per cent of company stock as part of an employee option scheme.

After the placing, institutions, private investors and employees will hold between 25 per cent and 30 per cent of company equity.

Explaining Horizon's decision to place such a small amount in public hands, Mr Naji said it would improve the company's credibility in pitching for business in Europe if it were a publicly listed company.

He said Horizon did not need additional funding following last year's private placement of 16.25 per cent of the company's equity, raising £7.35 million. That move followed the deferral of a public listing, because of stock market weakness.

"We don't need to raise cash. We just want to complete the process we wanted to put in place last year," said Mr Charles Garvey, group operations director, and second largest shareholder with 7.3 per cent.

It is understood the fees and administration costs of bringing the company public will come to around £300,000 (€379,000).

Horizon will now consider a number of acquisitions - most likely outside the Republic - as it plans to expand its Internet infrastructure and knowledge services business, where annual growth is running at more than 100 per cent.

Using its existing debt facilities, Horizon could draw down between £5 million and £10 million to fund this expansion.