Drug manufacturer Quantum Pharma Plc has confirmed its intention to stage a £106m flotation on the AIM market of the London Stock Exchange.
The County Durham-based firm expects high demand for the share placing, which will launch on December 11, aided by nominated advisors and brokers, Zeus Capital.
Quantum, which employs around 320 people across its UK sites, hopes to raise £106m to be used for paying down debts and to complete its acquisition of Kent-based pharmaceutical developers, Colonis.
The firm also said its AIM listing would provide access to capital markets for further equity funding in the future, should it be required for acquisitions and acceleration of strategy.
Quantum is already backed by private equity investors LDC, through its funding of the firm’s £32.5m management buyout (MBO) in 2009. The listing will allow LDC a partial exit, bringing its stake in the business down from a 47.5% to 10%. LDC also backed the MBO of North East neighbours Aesica in 2004.
Directors at Quantum said that following the flotation they intended to launch a “progressive” dividend policy, in line with future earnings growth.
For the year ending January 31 2016, Quantum said it expected to pay a dividend that equates to a dividend yield of 1.25% based on the placing price, subject to available funds.
The firm is led by former KPMG accountant Andrew Scaife as chief executive and former Tanfield Group head of management accounting, Martin Such, as chief financial officer.
Mr Scaife told The Journal the listing would position Quantum for growth which was likely to create jobs in the North East, regardless of whether growth opportunities lay abroad.
He said: “This is about giving ourselves the space to grow, particularly through businesses such as our Biodose unit. Here we have technology that can remotely monitor people taking medicines, which is all saving time and resources by minimising hospital visits.”
He added: “Our decision to list on AIM makes both strategic and commercial sense as we take Quantum to the next stage of its development. We are delighted to see such high levels of institutional demand and we now look forward to working with our new institutional shareholders.
“Having established our position as a market leader in the UK niche pharmaceutical market in which we operate, we feel that by joining AIM, Quantum will be able to capitalise on the fantastic market opportunities that are available to us both in the UK and overseas.”
To coincide with the flotation, Quantum also announced the conditional appointment of two prominent pharmaceutical industry names to non-executive positions.
Former president of GSK Consumer Healthcare, John Clarke, the man responsible for Lucozade’s growth between 1996 and 2011, is expected to become non-executive chairman while Sheila Kelly OBE, a former chief executive of the Proprietary Association of Great Britain, is expected to become a non-executive director.
Established in 2004, Quantum is the brainchild of four former manages of the Unichem-owned Eldon Laboratories. It operated from clean-room facilities at Tyne Metropolitan College before moving to purpose-built premises in Burnopfield.
Its core business is the manufacturer and supply of ‘specials’ - niche unlicensed drugs applied to more unusual conditions and manufactured by altering a licensed drug in some way or produced from the active pharmaceutical ingredients.
Quantum also supplies special obtains, which are pharmaceutical products ordered infrequently by chemists and wholesalers due to their relative expense or perishable nature.
The firm supplies large retail pharmacy chains in the UK, pharmaceutical wholesalers, hospitals, independent pharmacies and dispensing doctors.
A series of acquisitions since 2009, including Colonis, Biodose, Protomed, and ToMMS, has helped Quantum grow considerably - now comprising five business units.
The structure includes Quantum Pharmaceutical, U L Medicines, Colonis, Biodose and Quantum Aseptics. The group posted revenue of £53.49m in the year ended January 31, 2014.
A successful placing is expected to give Quantum a market capitalisation of £125m.