20 Jul 04. The firm that spun out of Marconi two years ago, e2v Technologies, launched conditional trading on the London Stock Exchange on July 20th.

The firm, which has a history dating back to a World War II radar system. The group started life in 1947 as English Electric Valve Systems and was latterly owned by Marconi until a £72m management buy-out funded by 3i two years ago.

e2v floated its shares at 155p each and moved up to an offer price of 164p. The firm offered 49,301,164 ordinary shares, and expects to raise almost £72m, £25.6m of which will go to the company. The rest will go to other shareholders, including investor 3i.

After the float 9.8 per cent of e2v’s shares will be owned by management, 1.7 per cent by an employee benefit trust with a total of 88.5 per cent of the firm’s shares floated.

Keith Attwood, chief executive of e2v, said: “The flotation moves the company into a new and exciting phase of its development. It brings many benefits, not least a more stable capital base that underpins our business objectives, which we aim to achieve both through organic growth and acquisitions. With a healthy order book and a good start to the current financial year, we face the future with confidence as a listed company.”

The firm develops technology and manufactures. It has developed products including: thermal imaging cameras for firefighters; technology for radiotherapy machines; cameras that can be used in low levels; and adapative cruise control for cars.

One division makes radio frequency sources and amplifiers used for radar and in radiotherapy equipment. Headquartered in Chelmsford and with around 1,300 staff, e2v has two production facilities in the UK, in Chelmsford and Lincoln. It has its own sales subsidiaries in North America, France and Germany.

Last year, the company, which exports 70 per cent of its output, increased operating profit by 46 per cent to £9.9m on sales of £97.6m and lifted its order book by 20 per cent to £83m.

It will raise enough money from the flotation to pay down £27m of debt and free up £30m of bank facilities to give the company headroom for acquisitions.

Keith Attwood, chief executive, said: “The market is very tough and investors are pressing down offers but the main shareholder is clearly happy because it is carrying on with the transaction and we are pleased because this is where we believe the business belongs.”
The new issues market has perked up this year with almost as much being raised in the first half as in the whole of 2003 but appetite among investors has become increasingly patchy, forcing many companies to scrap flotation plans or cut price expectations.