Alphawave IP Group PLC, a British-Canadian computer chip maker, said it is considering plans for an initial public offering (IPO) on the London Stock Exchange’s main market in what could be the latest entry in a string of tech IPOs on the UK market.
The company said it has managed to secure cornerstone agreements with funds managed by both BlackRock and Janus Henderson to subscribe for around US$510mln (£366mln) of offer shares, which will give the group a valuation at admission of around US$4.5bn (£3.2bn).
Alphawave, which makes chips to help drive data through phone networks and data centres, said it is “growing rapidly” and has a strong pipeline of customers comprising some of the world’s largest tech firms. The group added that it has been profitable since its first full year of operation and that from 2019 to 2020 revenues have increased by over 200% year-on-year.
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“Since we founded the company in 2017, our solutions have repeatedly established benchmarks in the industry in terms of performance, power consumption, size and flexibility. We have achieved a lot in this time: we have some of the world's leading semiconductor companies as our partners and customers, we have an exceptionally fast-growing revenue track record, and we are a highly profitable company,” Alphawave president and chief executive Tony Pialis said in a statement.
“We have chosen to come to the UK because of its incredible technology and semiconductor industry ecosystem. The strong research base in the UK - and our new R&D headquarters in Cambridge - offers an excellent foundation for the next stage of our global growth. There is a deep pool of knowledge, experience, and talent,” he added.
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“Alphawave IP’s declaration of its intention to float on the London Stock Exchange comes at a particularly interesting time for many reasons. The global silicon chip industry is booming, British investors are on the look-out for hot technology stocks and the UK Government’s examination of NVIDIA’s planned purchase of ARM – a company which has the same operating model as Alphawave IP – highlights the importance of the semiconductor industry to the economy, both here in Britain and worldwide”, said AJ Bell’s Russ Mould.
“Global chip sales rose 5% in 2020, despite the pandemic and the subsequent global downturn, reaching a new high of around US$430bn…This strong performance despite the testing economic backdrop has not escaped the attentions of investors…This could all hope to stoke interest in the Alphawave IP flotation, especially as the UK market still lacks the exposure to fast-growing industries that many investors crave, although stock pickers will still look to apply the four classic tests which they should use to assess any firm, new or well-established,” he added.
If Alphawave’s IPO goes ahead, it will be an opportunity to rejuvenate the recent flurry of tech floats on the UK market, which so far have met with varying degrees of success.
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The most recent tech IPO in London, online buyer and seller of second-hand technology MusicMagpie PLC (LON:MMAG), made a positive start to life as a listed company on Thursday morning, with the shares rising above its offer price of 193p each.
This may signal to Alphawave and those eyeing it as an investment target that the IPO boom is still on the front foot despite the fairly disastrous debut of food delivery firm Deliveroo PLC (LON:ROO), which tumbled well below its 390p offer price on its first day of dealings in late March and since then has not recovered.