A fast-growing accounting software firm that has more than 50,000 business customers has raised £10.7 million by floating on London’s Alternative Investment Market (Aim).
The initial public offering by Edinburgh firm FreeAgent – co-founded by former RAF fighter pilot Ed Molyneux – valued the company at £34.1m.
This is a transformational event for FreeAgentEd Molyneux
The flotation is one of only a handful of stock market listings by Scottish firms in recent years and the first on Aim since Rangers FC, which joined in 2012 but later de-listed. It also comes after a year in which Scotland’s tally of listed companies has fallen with the loss of BPI, Superglass and Energy Assets to takeovers.
FreeAgent, which was set up in 2007 and develops accounting software aimed at the UK’s five million “micro-businesses”, raised £8m for the company by placing more than 9.5 million shares with institutional investors at a price of 84p each. A further £2.7m was raised for existing shareholders by selling almost 3.2 million shares.
Molyneux, the company’s chief executive who owns just under 9 per cent of the company worth around £3m following the flotation, said: “We are very pleased to have been admitted to trading on Aim – this is a transformational event for FreeAgent. I am delighted by the interest shown in FreeAgent by investors, resulting in our successful placing, and equally delighted to welcome on board our new shareholders.”
The flotation comes after a number of other companies – including fitness chain Pure Gym and software group Misys – recently pulled the plug on their planned listings amid volatile market conditions, but Molyneux said that FreeAgent was looking forward to life as a quoted company “with confidence”.
He added: “Our entry to Aim is a positive step that marks the next phase of FreeAgent’s development as we progress our growth strategy.”
With about 52,000 active subscribers, up from 32,000 three years ago, FreeAgent’s revenues have grown at a compound annual rate of 34 per cent over the past two years, with annualised committed monthly recurring revenues standing at £7.7m at the end of September.
The company recently appointed Andy Roberts as its non-executive chairman. Roberts led Innovation Group, the insurance software specialist, from 2009 until its £500m sale to investment group Carlyle this year.
Commercial law firm Maclay Murray & Spens advised FreeAgent on its float, and head of capital markets Brian Moore said: “Flotation is always a landmark moment for any fast-growing business and we’ve been working closely with our long-standing client FreeAgent on their IPO for some months now.
“Despite the lingering uncertainty over Brexit and now the outcome of the US election, there is still widespread demand for quality UK investment opportunities.” Shares in FreeAgent closed up 3.5p on their placing price at 87.5p.