1 THE NEWCOMER
Who:

Brian Hett chief executive of Irish veterinary products manufacturer Tridelta

When:

Raised €600,000 in August 2003

Tridelta is one of the few companies to pull off an OFEX fundraising in 2003. For chief executive Brian Hett (pictured far right) it was the best solution when his company needed money for growth but found itself in the equity gap. “We needed around €1m and so we fell between a rock and a hard place: we were not a start-up but we didn’t need €5m which meant venture capital firms were not interested in us. OFEX gave us a route to raise that type of money as well as provide us with liquidity and a higher profile.”

Bearish market sentiment made it a tricky process but Hett says this would have been the same however Tridelta had raised the money.

More significant was the amount of time the fundraising soaked up. “It was distracting, both physically and mentally. There are other things you would be thinking about if not going through the listing, so it definitely detracts from your focus. But as a biotech company you have to raise the money, you have little choice.”

His advice to other companies considering a move onto OFEX is to think carefully about how much time you have to manage the process. “However long you think it will take, multiply that by three. It takes a tremendous amount of time.” 

2 THE SURVIVOR
Who:

Nick Jaspan, managing director of J4B, an online grants database

When:

Raised £565,000 in July 2001 When Nick Jaspan (pictured far left) decided on an OFEX listing it wasn’t the first time the company had raised cash, but dwindling funds from its first fundraising that forced the move. “We were running out of cash. We always knew it would run out in the summer of 2001, but by then we’d be able to show actual products. We had hoped to float in April 2001 but it was delayed and we ducked and dived our way through the float in a miserable market,” says Jaspan. “We didn’t go to venture capitalists because they wouldn’t have touched us. Maybe we could have raised the money from rich individuals but we valued ourselves at £3m and there’s no doubt they would have valued us at less than that.”

Jaspan says far from being straightforward, the fundraising process was arduous and left him waking up in the night in cold sweats wondering whether he was doing the right thing.

“It was a pain in the arse. You can dress things up however you like, but the fact was the initial revenue projection had not materialised. Trading was actually looking good, going forward, but we could only tell people about actual trading, which was dismal, rather than our projections. We had some good contracts, but they were only worth between £5-£10,000 each.”

In the end J4B scrambled £565,000- £5,000 above the minimum subscription – allowing the business to survive. Two years on it has released unaudited interim results showing the company moving into profitability for the first time.

3 THE AQUIRER
Who:

John French, chairman of Air Music & Media Group, music copyright producer/licensor

When:

Introduced to OFEX in September 2001

For Air Music & Media a move to OFEX was only about one thing: having paper to make acquisitions.

“We wanted to go on the acquisition trail but we were not of a sufficient size and scale to join a more senior market. We wanted a trading facility and shortly after joining OFEX we made the first acquisition using a mix of paper and cash,” says chairman John French (pictured near right). French joined the company shortly before its move OFEX, having been through the process before, to oversee the move, something, he says helped minimise the disruption to the business.

Just after listing, the company bought North American budget CD distributor Legacy Entertainment for $2.3m. French says OFEX status helped the company’s profile but this was a minor concern

“We were more concerned about bedding in our first acquisition than raising our profile. But you have a trading facility and you have PLC status and that gives confidence to your backers.”

The company left OFEX and stepped up to AIM in July 2002 raising £750,000, a move which also attracted a number of new investors. “AIM is more active. Since being on AIM we’ve made a major acquisition (the purchase of Hollywood DVD in November 2002 for around £6m) and attracted a broader range of institutional investors. We’ve found that all the VCTs will look at us on AIM, but they wouldn’t on OFEX.”

4 THE WAVERER
Who:

Rodney Shearer, managing director of Alba Trees, producer of plants

When:

Introduced OFEX July 1996

If Rodney Shearer hadn’t been obliged to find an exit route for his original investors in 1996, he says he would never have moved onto OFEX. Now Shearer is seriously considering whether he wants to stay on the list: “OFEX has more competition now. Plenty of companies have been in touch with me saying they are a better and cheaper option. It’s not that we’re pee’d off with OFEX but we are only a small company with a turnover of £1.4m last year and the £4,000 a year it costs us to be on OFEX is not inconsiderable.”

Apart from the costs, Shearer says that being on the exchange hasn’t created extra work. “You have to publish year-end accounts and interim reports. Apart from that the most onerous thing is just keeping up with the rules. I didn’t realise we had to make an announcement about our new shareholder until I got a letter ticking me off for not having done so.”

Surprisingly when it comes to future fundraising, OFEX doesn’t figure in Shearer’s plans. “We’ve thought about it and I’m sure we will fundraise again at some point but we wouldn’t look to OFEX. It’s possible that we might merge with someone looking for a listing through a reverse takeover, and possibly join AIM as a larger company.”