The largest UK tech initial public offering (IPO) in three years was announced this week by Yorkshire-based Servelec in another move that illustrates how some of the UK's biggest technology firms are located far beyond Old Street's so-called Silicon Roundabout in East London.
Software company Servelec revealed yesterday that it is seeking a £140 million valuation on the AIM stock market, making it the largest tech floatation since PrometheanWorld completed an initial public offering in March 2010 that valued the business at £187.5 million.
Servelec CEO Alan Stubbs said: "We are very pleased to announce our intention to join the main market of the London Stock Exchange. The markets in which we operate have structural and regulatory growth drivers and we have identified numerous commercial opportunities to pursue additional growth for our business.
"The present ownership structure, as part of a larger group, places a constraint on the ability of the management team to capitalise on these exciting opportunities. An IPO is the natural next stage of development for Servelec, providing the appropriate platform to drive growth both organically and through acquisition."
Servelec, which grew out of Sheffield’s thriving steel industry in the 1970s, was bought by IT group CSE Global a decade ago but the organisation is now planning to sell its entire holding as part of the IPO.
Servelec was initially founded as a specialist for control systems in steel mills but it quickly expanded into the oil and gas and water markets. Today it develops software and hardware systems used to control the UK’s gas grid and elements of the nation’s water network. The firm's controls technology is also used by the Met Office to predict weather patterns in addition to North Sea oil and gas platforms, TV stations such as the BBC and ITV, and many of the nation’s lighthouses.
The company also operates in the health market where it designs, develops and implements software for both the mental health and community health sectors in England.
In the year ended December 31 2012, Servelec had revenues of £39.4 million giving an adjusted profit before tax of £11.9 million.
The company employs approximately 500 full time staff operating predominantly from offices around the UK, with the largest number based at the firm’s headquarters and engineering site in Sheffield.
London vs the rest of the UK
Much attention on the UK technology scene has been focused on London but there are other areas in the country with a sizeable technology scene.
WANDisco, another Yorkshire software firm with its roots firmly in Sheffield, floated last September and has grown tenfold since, while EMIS, a healtcare software developer just outside Leeds, has doubled in size since its listing in 2010.
Elsewhere, firms in the Cambridge tech cluser, also known as Silicon Fen, are gaining real traction. For example, remote access software start-up RealVNC could become the UK's next billion dollar tech company, while tech success stories such as ARM, Broadcom and the Raspberry Pi Foundation also operate from the region.
Manchester, Brighton, Oxford and Edinburgh are also perceived as cities with a growing technology scene.
Floatations such as that of Servelec will inevitably be perceived as a positive boost to the UK technology sector and the London Stock Exchange but they are still dwarfed by the huge floatations on Nasdaq and the New York Stock Exchange in the US.
A number of initiatives, such as Tech City UK's Future Fifty programme, have been introduced in the UK to support high growth companies and encourage them to list on London markets but some ctirics are still concerned that the UK won't be able to produce the next Facebook or Twitter.