A technology testing company to corporate giants BT and Facebook is poised to raise £22.5m through a listing on London’s junior market.
Calnex plans to float on Aim at the beginning of October, with an oversubscribed placing valuing the company at £42m on admission.
The business, based in West Lothian, Scotland, designs and manufactures testing equipment for telecoms companies looking to check the performance of their networks. It hopes to take advantage of the rollout of 5G, the next-generation mobile network that is up to 20 times faster than 4G.
Existing investors, including staff and chief executive Tommy Cook, will receive £16.5m through the raise, with £6m going to the company. The cash injection will help it pay down debt, invest in research and development, and pursue takeover opportunities.
Mr Cook, who founded the company 14 years ago, said the telecoms industry was going through “unprecedented levels of change”, which presented opportunities to expand the business.
He added: “Having demonstrated sustained growth since inception, the move on to the public markets will provide us with new capital, a raised profile and enhanced ability to execute on acquisitions, as we seek to capture an increased share of the growing market for telecoms test solutions.”
Calnex lifted pre-tax profits by a fifth to £3m for the year to March 2020, with turnover also climbing 30pc to £13.7m. Around 80pc of its revenues come from repeat customers.
Alongside American technology giants IBM and Intel, the company supplies China Mobile, Ericsson and Nokia.
On admission, the business will have 87.5m ordinary shares in issue, with a free float of around 43pc.
Mr Cook will remain the largest shareholder, with a 21pc slice of the business, while institutional investors and the Business Growth Fund will join as new shareholders.
The listing will follow a bumper September for flotations. Online retailer The Hut Group secured the UK’s biggest listing in three years on Wednesday when it raised £1.9bn through a flotation in London.