Challenger accounting firm to list on London AIM with £21m market cap
Professional services company DSW Capital will make its initial public offering (IPO) debut today, while Big Four firm rivals focus on fending themselves off from more scandals.
DSW, which owns advisory firm Dow Schofield Watts, plans to place five million shares at 100 pence per share to raise gross proceeds of £5m when it lists on AIM with a market capitalisation around £21.4m.
The news of a challenger firm float which was founded by three ex- KPMG employees, comes as plans to force FTSE 350 companies to use challenger audit firms have reportedly been signed off by the business secretary as pressure for reform mounts.
The reforms will mean FTSE 100 and FTSE 250 businesses, whose financials are audited by any of the Big Four firms, will be forced to appoint a smaller audit firm in addition.
The challenger firm would work alongside their larger rival on a company’s audit – a process referred to a “managed shared audits”.
DSW may have its eyes on more than just its rivals clients though. It’s “challenger model,” the company said, attracts experienced senior professionals – mostly from the Big Four accounting firms.
“The successful fundraise will support our strategy to capitalise on the substantial growth opportunities presented in the changing UK accounting market,” said James Dow, DSW chief executive and co-founder, who spent 13 years at KPMG.
Being listed, he added, “will help raise the profile of DSW further, enabling us to accelerate the growth of our network.”
The business said it plans to scale its agile business model by expanding across geographies, service lines and by investing in existing teams in larger firms.
The Group recorded operating profits of £1.7m for the year ended 31 March 2021m following strong growth over recent years. DSW also reported atwo year historical adjusted operating profit CAGR of 28 per cent.
The company, which operates seven offices across England and Scotland, recently made it into the top 50 Accountancy firms compiled by Accountancy Age, and describes itself as “one of the first platform models disrupting the traditional model of accounting professional services firms.”
Shore Capital is acting as Nominated Adviser for DSW Capital’s IPO.