SURPRISINGLY Scotland lags behind other parts of the UK in AIM listings, writes Rosalie Chadwick
Since the AIM market was launched in 1995, more than 3,600 UK and international companies have joined AIM, raising £92 billion through new and further issues, and contributing around £25bn to the UK economy each year.
Scotland has no shortage of businesses which are on a high growth trajectory and would be suited for an AIM listing, so it may be surprising that we lag behind other parts of the UK when it comes to opting for this particular route.
This can be attributed to a number of factors, including a thriving private equity community, a large number of owner/manager businesses which are traditionally nervous about going to market, and a default tradition of trade sales as an exit route.
The AIM21 summit in Edinburgh on 22 September seeks to address this anomaly and will reach out to entrepreneurial business owners in the life sciences, IT/digital, and food and drink sectors, who could benefit from this form of second phase funding.
Hosted by Informatics Ventures, AIM21 is co-sponsored by Grant Thornton, Talent Spark, my own firm Pinsent Masons and the London Stock Exchange which will highlight its ELITE programme to support companies through their next stage of growth.
High-calibre guest speakers include Keith Brown, MSP, who will share how the Scottish Government is supporting businesses which are upscaling or internationalising, chairman of Scottish Enterprise and former Wood Group CEO Bob Keiller, and the London Stock Exchange’s Marcus Stuttard, who is Head of AIM.
The summit aims to stimulate discussion within companies on the different options available to them as they prepare to scale-up and take their business to the next level. Ideally, these established businesses will have good quality, ambitious management teams and high growth potential.
Typically, companies thinking of an AIM listing will have a market capital of £10-£100 million on listing and on average be looking to raise £5-£50m. Companies working in life sciences, food and drink and IT/digital are a great fit for the AIM market and there are excellent Scottish role models in these sectors, for example iomart, Craneware and SMS. These three sectors have been consistently supported by the Scottish business angel network, many of whom will be present at AIM21 as investors interested in possible exit routes.
Companies considering an AIM listing can do a great deal themselves to prepare. A forensic and critical look ‘under the bonnet’ will highlight weaknesses compared to competitors, shake out old skeletons, and provide a platform to deep-clean operations and procedures. Major issues that are brought to light should be addressed prior to listing, otherwise valuation may be prejudiced when entering the market.
It is also worth bearing in mind this kind of good housekeeping preserves the value of a company, irrespective of whether it ends up opting for a trade sale, PE or AIM. For any business thinking of an AIM entry, our primary objective as legal advisers is to manage the process and ensure the transition goes as smoothly as possible.
Over the last ten years Pinsent Masons has been involved in almost every significant AIM float which has taken place in Scotland, and it is our intention to remain central to the many entrepreneurial success stories coming out of Scotland.