SOFTWARE group Iona Technologies is to float on the NASDAQ market in New York in a move that will value the six year old Dublin company at a minimum of £165 million. The move will put a value of millions of pounds on the shares of the company's founders - four former computer scientists at Trinity College.
Iona is issuing three million new shares in the initial public offering (IPO) at between $14.50 and 16.50, while existing shareholders - headed by Sun Microsystems are capitalising on the flotation by selling 4.65 million shares worth $67 million (£42 million).
Following the IPO and the offering of the 7.65 million shares, Iona will have a total of 18.3 million shares in issue. At the indicated flotation price of between $14.50 and $16.50, Iona will have an initial market capitalisation of between $265.4 million and $302 million (£165 million to £187 million). The new investors will hold 41.8 per cent of Iona shares when the IPO is completed.
The stakes of the company's founders and senior management will be worth millions of pounds. They are managing director Mr Chris Horn and Mr Annrai O'Toole, Mr Sean Baker and Mr Colm Newman.
The initial public offering the latest in a series of NASDAQ flotations by Irish high technology companies has been underwritten by Lehman Brothers, Robertson Stephens and SoundView Financial.
As the new shares are being offered in the form of American Depository Shares, Iona will convert into a public limited company in Ireland, ahead of the formal offering of the new shares on the NASDAQ market. At the indicated offer prices in the preliminary prospectus lodged with the SEC, Iona's market capitalisation would put it among the top 20 shares on the Irish market.
Apart from the 3.75 million shares that Sun Microsystems is planing to sell in the flotation no details are yet available on who are the holders of the 900,000 other Iona shares that will be sold by existing shareholders. At the indicated prices, these are worth between $13 million and $14.8 million.
The IPO filing document shows that Iona had after tax profits of $1.53 million on sales of $21.2 million in 1996, compared to profits of $2.2 million and sales of $8.6 million in 1995.
Iona, based in Dublin and with offices in the United States and Australia, makes the world's most popular Object Request Broker Middleware. This is software that allows engineers to use different components from other software to design programmes.
In an interview last month with The Irish Times, Iona's chief executive Mr Chris Horn said the company controlled 60 per cent of the world market for the software. He pointed out that because demand was tripling emery year, Iona had to match this rate of growth just to maintain its market share.
The company was formed in 1991 under the umbrella of Trinity College Dublin, with just three employees. By 1993 its revenues had hit $1 million (£600,000) and it had 15 workers. It moved out of Trinity to new offices in Dublin, and by 1994 had reached annual revenues of $2.3 million. The next revenues jumped to $8.3 million.
