ECI Reportedly Planning a London IPO
More than ten years after it was delisted and taken into private ownership, optical transport specialist ECI Telecom is reportedly planning to list its stock again in a move that would value the company at about £500 million (US$650 million), according to a report from Israeli business news site Calcalist.
The report, which cites an unidentified source with detailed knowledge of the IPO plan, suggests that ECI's owner, the Swarth Group investment fund owned by Israeli businessman Shaul Shani, would seek to raise about £130 million ($170 million) by listing some of the company's stock on the London Stock Exchange at some point in the coming year.
ECI declined to comment on the speculation.
The timing of the move makes sense. The company's CEO Darryl Edwards stated earlier this year that ECI had a strong 2017, with double-digit sales growth driven by the addition of 65-70 new customers. He also noted that ECI had a strong order book for 2018 and, in more recent conversations, noted that the company has been performing particularly well in India, one of its key markets.
While the company doesn't discuss its financials, it is believed to have generated revenues of around $380 million last year. It has also recently reduced its operating costs by axing 63 jobs (about 6% of the workforce) earlier this year.
ECI is smaller now than it used to be, following years of fierce competition from the likes of Huawei. In 2007, the company was taken private by Ashmore Investments (90% stake) and Swarth Group (10%) in a $1.2 billion deal, but in early 2014 ECI's value had dipped to about $220 million when Swarth bought out Ashmore for about $200 million.
If ECI manages to list again with a valuation in the region of $650 million, that would be a massive validation of the company's strategy during the past four years, including the development of its Elastic Network marketing story underpinned by focused technical developments, including investments in transport SDN capabilities that is now enabling it to build a story around arguably the hottest area in optical -- 5G transport. (See 5G Transport – Where Do We Start?)
— Ray Le Maistre, Editor-in-Chief, Light Reading