ROMAG HOLDINGS PLC

GLASS SPECIALISTS

AN AIM LISTING
CASE STUDY
Overview
• Manufacture of laminated glass/plastic composites
- security, transport, architectural applications
- specialists in bullet/blast resistant glass

• Based in Consett

• AIM listing November 2003

• At listing
turnover c£16m
pre-tax profits c£1m
150 employees
Issue for Romag
Funding required for new product production line

• structural solar panels

- developed in conjunction with BP Solar
• product development complete

• timing of market entry

- too early – returns delayed
- too late – miss the boat
Options reviewed

• Borrowings
- gearing already high
- considered too risky

• Private equity
- venture capital a strong contender

• Flotation on AIM
Decision factors
• Pricing
- flotation better, even after costs
- VC route not pure equity

• Retaining management control

- VCs want closer involvement

• Ability to float
- internal controls
- stockmarket conditions
A few pointers
• Good advisers
- listen to their advice

• Broker/corporate finance distinction

• Pitching the price

- up front dilution v success in aftermarket

• Don’t underestimate
- internal resource required
- disruption, especially during due diligence
- diversion from managing the business
Was it good for us ?
• Placing raised £7.2m
- new production line now operational
- reduced gearing
- market capitalisation now c£80m

• Marketability of shares
- for small shareholders at least

• Share incentives more meaningful (e.g. options)

• Greater “visibility”
- higher profile
- commercial dealings with larger companies
Was it good for us ?
• Greater “visibility”
- under the spotlight
- knowing/following the AIM rules
- presentations to shareholders/analysts

• Increased overheads
- nomad/PR/non-execs
- report and accounts/audit
- corporate governance “red tape”
Conclusions

• Romag achieved its objectives

• Some aspects painful

- but most also have some benefit

• Regrets ?
- too few to mention