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Apertio AIMs for 2007 IPO

Telecom database specialist Apertio Ltd. is planning an IPO in London in 2007 and has already set the public listing wheels in motion, according to the company's VP of marketing, Andrew Wyatt.

He says the company, which sells HLR (home location register, the main databases of mobile subscriber information) and HSS (home subscriber server, the next-generation HLR for IMS environments) systems to operators, has scored a number of significant contract wins this year. (See Apertio Wins at Vodafone, T-Mobile Deploys Apertio, Apertio Wins at Tele2, and IMS Guide.)

Key partner Motorola Inc. (NYSE: MOT) has helped bring in some of that business. Wyatt says Apertio signed its biggest ever HLR deal with Motorola in February this year for a deployment at Pakistan mobile operator PMCL (Mobilink) and is supplying its HSS as part of Motorola's WiMax engagement at Wateen Telecom , also in Pakistan. (See Motorola Makes WiMax Breakthrough and Moto Upgrades PMCL.)

The Asia/Pacific region has been particularly strong, adds Wyatt, with another six deals set to close soon in the region.

That growth means Apertio is on course to double its revenues this year, from the £8.5 million (US$16 million) generated in 2005 to about £16.5 million ($31.2 million) this year. Wyatt adds that the company is due to hit profitability next year.

The company has also grown its headcount significantly. It now has about 210 employees, up from about 40 at the beginning of 2005. New faces include former Nortel Networks Ltd. chief software architect Adam Bryant, who is now Apertio's CTO for Asia/Pacific, and Jonathan Harvey, the former mobile networks CTO at Siemens Communications Group , who joined as CTO for the EMEA region.

Wyatt says he has explored the possibilities of listing in New York as well as London, but found, like other fast-growing niche players, that listing on London's Alternative Investment Market (AIM) is about 10 times cheaper than joining Nasdaq , where the annual costs of just being on the exchange are about $5 million.

AIM has attracted a number of telecom firms in the past few years. (See Sandvine Leaps on London Listing, Citel Raises $15M, Sets for IPO, Formula Completes IPO , We're in the Money, and Session Controller IPO Scores Success.)

Apertio, currently one of Light Reading's Top Ten Private Companies, has raised $50 million to date, with its latest round in February this year, when the company first announced it was contemplating an IPO. (See IMS Firm Raises $30M.)

But clearly Apertio doesn't have the market to itself, and Wyatt admits his company has strong competition, most notably from mobile giants Ericsson AB (Nasdaq: ERIC) and Nokia Corp. (NYSE: NOK), while Lucent Technologies Inc. (NYSE: LU), he says, "has a well developed distributed HLR. Lucent poses the greatest threat to us."

— Ray Le Maistre, International News Editor, Light Reading

Peter Heywood 12/5/2012 | 3:45:00 AM
re: Apertio AIMs for 2007 IPO I'm trying to recall a company in our field that launched on AIM and went on to be a monster success.

Companies that have floated on AIM:

Cachelogic
http://www.lightreading.com/do...

Newport
http://www.lightreading.com/do...

Citel
http://www.lightreading.com/do...

Sandvine
http://www.lightreading.com/do...

Ubiquity
http://www.lightreading.com/do...

Atlas Interactive
http://www.lightreading.com/do...

jcrawshaw 12/5/2012 | 3:44:47 AM
re: Apertio AIMs for 2007 IPO The performance of tech stocks floated on AIM has generally been poor. Of the stocks you mentioned only two are trading above their IPO price and they have a very short trading history - time will tell.

* Cachelogic has still not floated.
* Newport floated in May 2004 at 71p and now trades at 6p (-ú10m market cap).
* Citel floated this July at 95p and now trades at 108p (-ú23m market cap).
* Sandvine floated this March at 75p and now trades at 109p (-ú124m market cap).
* Ubiquity floated in May 2005 at 33p and now trades at 21p (-ú38m market cap).
* Atlas Interactive has not floated but Atlas Group did sell some stock in a business called Cellcast when it floated on AIM. Cellcast floated in September 2005 at 71p and now trades at 14p (-ú4m market cap). Atlas Group still owns 28%.

I'm not sure if -ú207m ($380m) qualifies as "monster" but this is the largest market cap telecom equipment stock on AIM - Imate. They are basically a distributor of HTC/Microsoft PDAs in the UK and Middle East. They floated at 210p in September 2005 and now trade at 175p.

Pipex is the biggest telecom service provider on AIM at -ú196m ($350m). They floated in 2000 at 19p and most recently issued equity in January of this year at 13p. The shares now trade at 8p.

In the Internet category iomart is the largest stock at -ú51m ($92m). It floated in 2000 at 90p and now trades at 74p.

The largest stocks on AIM are in the oil exploration and mining sectors. But the largest of these is only -ú1bn ($1.8bn).

I think the closest to a "success" in terms of AIM telecom equipment floats is BATM (aka Telco Systems) which got so big in the bubble it was moved from AIM to the main London stock exchange in 1999. BATM floated in 1996 at 125p, issued fresh equity for the takeover of Telco Systems in 2000 at 700p and now trades at 25p.

Given the poor performance of most tech IPOs on AIM I think investor appetite is low for new offerings (hence presumably the postponed floats of Atlas Interactive and Cachelogic). The recent wave of consolidation among small cap brokers in the UK suggests they also think the boom times are over regardless of the lighter regulatory regime the UK and AIM offers listed companies vs the US. However, I think there are some interesting opportunities among the bombed-out AIM tech sector. I don't think institutional investors have the patience for these recovery candidates but I think private equity backed MBOs could be an interesting way to take advantage of some irrationally low valuations. Equally, takeovers by larger companies is a likely outcome for many AIM tech stocks.

Anyone interested in discussing these opportunities with me please email [email protected]
palaeozoic 12/5/2012 | 3:44:44 AM
re: Apertio AIMs for 2007 IPO
Why would a marketing guy speculate on an IPO that could be at least a year out? If they really did see an IPO on the horizon they'd keep quiet. The fact that they're not would seem to indicate wishful thinking (a common activity for marketing types). Maybe still hoping for Bubble 2.0.




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