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2e2 boss dismisses talk of IPO

Microscope contributor

 

2e2 has dismissed reports that it plans to float on the London Stock Exchange’s alternative investment market (AIM).

 

Yesterday the FT predicted that the services group along with a bunch of other UK firms were planning an initial public offering (IPO) as a 70% rise in tech stock valuations over the last nine months meant there was an appetite for new issues.

 

However, Terry Burt, CEO at 2e2 said it had evaluated a potential flotation but decided against the move, partly because of the volumes of tech shares that are expected to hit the UK exchange.

 

“At the end of the day, when the first round of IPOs come in we believe that they will be heavily discounted by 20% to 30%,” he told MicroScope.

 

He also believed that it was also a bad time to go public as some fund managers may be looking to exact revenge on private equity houses that offloaded assets at high values “that subsequently became depressed”.

 

This is not the first time 2e2 has considering going public; in mid-2004 it axed plans to float on AIM to raise £25m to pay down debts as weak valuations and trading conditions prevented the move.

 

Burt did not rule out a potential listing in the future, adding, “never say never”.

 

The Newbury-based firm has been one of the most acquisitive services led resellers in the UK and most recently forked out £58m for NetStore.

 

However Burt suspected that it would not be making further acquisitions in 2010, “we are happy with where we are and will continue to do what we have been doing rather than clearing up someone else’s mess.”

 

The Duke Street Capital owned group, has a debt of £150m which Burt said it was servicing.

 

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