Two technology companies, BCO Technologies and Iona Technologies, are set for favourable debuts on the Irish Stock Market this week. BCO will see its shares listed on the Developing Companies Market in Dublin (and AIM in London) on Wednesday while Iona, which is already listed on NASDAQ in New York, will have a full listing in Dublin, probably on Friday.
The technology companies are now receiving much more interest from institutions. BCO will have more than 20 institutions as share- holders. Iona has had increasing interest from Irish institutions.
BCO was set up to exploit the commercial potential of a new product, called BCO Substate, which the company says replaces the conventional unprocessed starting silicon wafer used in the fabrication of analogue integrated circuits (ICs). These ICs are used to link digital computers to the "real world" and are used in a number of products, including telephone systems, modems, mobile phones, faxes, disc drives, automotive products, instrumentation and white consumer goods. BCO says its product offers manufacturers of analogue ICs fabrication facility at no material additional capital cost and can improve the performance of finished analogue Ics.
It only commenced production a year ago and up to now has been financed by venture capital to the tune of £5.7 million. The venture capitalists include Enterprise Equity, a venture capital group owned by the International Fund for Ireland (this will amount to 13.9 per cent after Wednesday's flotation), 3i Group (19.3 per cent) and ACT Nominees (16.6 per cent).
BCO's chief executive, Dr Scott Blackstone, will have 838,192 shares (4.7 per cent, valued at £1.17 million). Mr Jim Corkery, another founding director, will have 473,761 shares (2.65 per cent, valued at £0.67 million).
Dr Blackstone has options over 249,714 shares at the placing price of 140p. Mr Corkery has options over 184,000 shares at 140p. BCO incurred a loss of £2.5 million in the nine months to September 30th 1997. A pro forma balance sheet, reflecting the placing, shows net asset of £7 million.
BCO is anticipating losses up to 1998. However, it plans to go into profit early in 1999.
While BCO plans to join the NASDAQ market in time, Iona by seeking an Irish share quotation while on NASDAQ, is doing the opposite. Also while BCO is valued at just £25 million by the placing - a premium will push this valuation up - Iona is valued at about £235 million. Goodbody Stockbrokers is advising both companies.
The move by Iona is designed to broaden its investor base. Also, technology shares on NASDAQ are often perceived as very high risk, while the quotation in Dublin may attract more long-term investors. As Iona is to be included in the ISEQ index, the movement of its share price will influence the index.
Other Irish technology companies listed on NASDAQ have been considering a Dublin listing. The fast-growing CBT group, for example, has indicated that it would consider having a share quotation in Dublin.
