The biggest British float of the year so far got off to a rousing start yesterday when shares in Alfa, the London-based financial software company, shot up by a third.
The shares began trading on the grey market in London at 325p, valuing the company at £975 million, and quickly rose to 429¾p, pushing Alfa’s market value well past £1 billion before its official admission to the London Stock Exchange next Thursday.
The IPO will make Alfa the fifth largest software company on the London stock exchange, while the flotation represents the biggest in the British technology sector since Sophos listed in July 2015.
The offer was oversubscribed, with demand from a wide range of heavyweight institutional investors, including Old Mutual and Henderson. It is understood that a third of investors seeking shares were not allocated any.
The flotation will bring a welcome boost to the British IPO market, where deal volumes dipped by more than a quarter in the first three months of the year amid fears about Brexit.
It will also mean a massive payout for the company’s owners. Andrew Page, 54, Alfa’s executive chairman who founded the company 27 years ago and wrote its first line of code, stands to pocket about £230 million, while Andrew Denton, the chief executive who joined 23 years ago, is expected to receive about £25 million.
Mr Denton, 45, hopes that the listing will help Alfa to win more customers. “With a track record of strong returns, the successful IPO of Alfa will assist us in continuing the momentum of the business in the years ahead,” he said.
Mr Page and Mr Denton have sold just above the 25 per cent threshold required for a premium listing on the stock exchange so that they can retain control of the company, which was founded in 1990 and was formerly known as CHP Consulting. They are now locked into their holdings and cannot sell further shares for 12 months.
The car finance industry is one of the larger segments of Alfa’s business, with motor financing packages increasingly popular as more people lease their vehicles rather than buying them outright. The company also provides software to asset financing related to machinery, oil tankers, IT hardware, as well as commercial vehicles, aircraft and satellites.
Rothschild Global Advisory was sole advisor to the company.
Analysts at Megabuyte, a technology intelligence service, said: “We see Alfa’s valuation uniform with the wider market, bringing another high-quality asset to the quoted markets.”