Exova edges above IPO pricing

MATERIALS testing firm Exova made a subdued start to life as a public company yesterday, with its shares barely moving above their initial public offering (IPO) price.

Ian El-Mokadem continuing to develop global footprint. Picture: Angus Forbes

The Edinburgh-based group priced its shares at 220p, valuing it at £550 million – lower than the £750m figure that City sources hinted at last month when the company unveiled its plans to join the market. Shares ended the day at 221p.

Yesterday’s IPO was the first by a Scottish firm on London’s main market since Energy Assets, the Livingston-based gas meter supplier, raised £15m when it listed in March 2012.

The flotation of a 40 per cent stake raised about £110m for Exova, which employs more than 3,600 people at 117 laboratories around the world.

A further £110m went to existing shareholders, including senior management led by chief executive Ian El-Mokadem and private equity backer Clayton, Dubilier & Rice (CD&R).

El-Mokadem joined Exova three years ago from catering giant Compass, where he was managing director of its operations in the UK and Ireland.

He said: “As we join the London Stock Exchange, we very much look forward to life as a public company and to continuing to develop our global footprint and reputation for excellence and delivering excellent service to our customers.”

Exova generated underlying pre-tax profits of £48.1m last year, an increase of 15.1 per cent on 2012, on revenues 10 per cent higher at £279m.

The company, which has its headquarters at Lochend Industrial Estate in Newbridge, boasts the likes of Boeing, Ford and US space agency Nasa among its clients and generates about 75 per cent of its sales outside the UK.

It is targeting a “progressive” dividend policy, with an initial payout ratio of between 20 and 30 per cent of adjusted net income before one-off items.

The firm, chaired by CD&R partner Fred Kindle, also said yesterday that Vanda Murray, who sits on the boards of defence contractor Chemring and IT outfit Microgen, has joined as a non-executive director.