$3.5m raising in the PIPE-line
Liliana Molina 12apr05
BRISBANE-based Internet exchange provider PIPE Networks will list on the Australian Stock Exchange next month to raise $3.5 million to continue its expansion into southern states.
Co-founders Bevan Slattery and Stephen Baxter will keep control of just over 64 per cent of the company with 8,750,000 shares to be issued at 40¢ each.
The company is expected to be valued at $12.3 million on listing and Mr Slattery said that while the amount they were looking to raise was relatively small it was enough for their expansion plans.
“In terms of the company’s evolution we’ve been growing rapidly and profitably,” he said.
“A listing was the preferred option (for raising capital) because there is significant value in the company and of course it will raise our profile.”
The float is fully underwritten by ABN Amro Morgans with chairman Roger Clarke last week joining the board along with WebCentral founder Lloyd Ernst.
Revenue for the company reached $2.5 million in 2003-04, an increase of 500 per cent with profit for 2004-05 expected to reach $1.1 million.
But investors are unlikely to see any dividends until 2006 where it is expected to equal between 30 and 50 per cent of after-tax profits.
PIPE Networks planned to continue its expansion into the Sydney market and start moving into Melbourne later this year.
The company has 39km of fibre-optic cable in Brisbane and 22km in Sydney.
The offer closes on May 9 with the listing expected on May 17.