Defence drilling firm tools up for London IPO
Aerospace drilling company Tek4 is gearing up for an initial public offering in London, Morning Wire can reveal, in a boost to the London Stock Exchange as it looks to tempt more defence firms to market.
The Leicestershire-based company, which counts Rolls-Royce and GE among its customers, is looking to raise £20m through a listing on London’s junior market Aim at a valuation of around £40m, sources told Morning Wire.
Bankers at Panmure Liberum have been appointed to handle the IPO, which is expected to take place later this year. Panmure Liberum declined to comment.
Tek4, which also has offices in Carolina, designs and manufacturers specialised drilling machines for planes and gas turbine parts.
Run by 40-year industry veteran Jason Duffin, it has recorded a surge in sales over the past year as conflict in Russia and the Middle East fuels demand for its machines. A new factory under development near its Leicestershire site is also expected to increase its production capacity by around 80 per cent, sources said.
Its listing will provide some relief to the London Stock Exchange after a dearth of new IPOs and a flurry of takeovers over the past year. Across the main market and AIM, just seven firms listed in the first six months of the year, raising £577m.
London market sets sights on defence firms
Bankers are on the hunt for defence related companies to bring to market as the government looks to shore up the industry and investors capitalise on a surge in demand.
Former defence secretary John Healey’s appointment as chancellor last week is also expected to herald a rise in funding for the sector. In his first speech as prime minister last Monday, Andy Burnham recommitted the UK to hiking defence spending from 2.6 per cent of GDP to the Nato target of 3.5 per cent by 2035.
If successful, the lift would mean a real-terms increase of more than £25bn in less than a decade.