London’s tarnished reputation for IPOs following the Deliveroo flop has been given a major lift with plans for the multi-billion pound flotation of a profitable tech company.
Toronto-based semiconductor firm Alphawave IP, whose technology enables data to travel faster and more reliably using lower power, is set to be valued at more than £3.2 billion.
It is establishing a new research base in Cambridge and has chosen to list in London because of the UK’s “incredible technology and semiconductor industry ecosystem”.
Executive chairman John Lofton Holt said: “We are a global business and proud to be taking Alphawave IP public in the UK where the Silicon IP business model was invented by great British companies like Arm and Imagination.”
The company is a rarity in the recent wave of Wall Street and London-listed tech flotations as it has been profitable since its first year of operation in 2018.
It is growing rapidly and boasts tier 1 customers, including some of the world’s largest tech firms.
The IPO is set to raise proceeds of £500 million for the company, with BlackRock and Janus Henderson the cornerstone investors.
Alphawave IP’s plans were revealed on another day of lacklustre trading for Deliveroo, with the food delivery app up 5.3p at 238.3p but still near its low point following a slide from the 390p a share seen in its IPO at the end of March.
The FTSE 100 index showed more signs of steadying after Tuesday’s big sell-off, with gains of more than 1% by drinks giant Diageo and AstraZeneca helping the top flight climb to 12.38 points to 6,907.67.
Betfair owner Flutter Entertainment and Ladbrokes business Entain were higher on the day that William Hill shares were suspended ahead of its takeover by US giant Caesars Entertainment.
The FTSE 250 index added 84.09 points to 22,169.82, led by fit-out and construction firm Morgan SIndall after its shares jumped 217p to 2085p on a strong trading update. Upper Crust catering firm SSP also rose 14.2p to 325.7p after securing £475 million from shareholders in its second fundraising since the pandemic struck.
On AIM, Gear4Music rose 56p to 852p after the York-based online retailer upgraded earnings forecasts on the back of strong demand for musical instruments during Covid-19 lockdowns. Sales jumped 31% to £157.5 million in the year to March 31, with the company also upbeat about trading in the new financial year.