A Staffordshire IT firm with a focus on the healthcare market has raised £9.15 million through through a placing on the London Stock Exchange’s junior market.
Instem Life Sciences, which employs 72 people at its headquarters in Stone, provides software which helps customers including GlaxoSmithKline and AstraZeneca speed up drug development and create safer products.
It joined the Alternative Investment Market (AIM) after a placing by Brewin Dolphin of 5,228,376 new ordinary shares at 175p, but by the end of its first day as a listed firm its share price was 185p.
The firm intends to use the cash raised from going public to embark on a series of acquisitions.
Instem chief executive Phil Reason said the firm operated in a very fragmented market, where there were several companies with complementary areas of R&D and geographical coverage that it could tap into.
“We have shortlisted 11 of 80 companies that we quite like the look of, four in the UK and Europe and seven in the US,” he said.
“It’s a mix of companies – companies that do similar things to us but in neighbouring areas of R&D.”
Instem is international in its activities, with the majority of its revenue – 60 per cent – coming from the US, 25 per cent from mainland Europe and 10 per cent from the UK.
The firm said it intended to increase its presence in the Chinese markets and that its software could help Chinese laboratories reassure Western pharmaceutical firms of the safety of their products.
Instem’s origins go back to 1969 when it was founded by David Gare, the firm’s current non-executive chairman and five colleagues.
Since then it has undergone a number of divestments, buyouts and reorganisations including 10 years as a public company on the LSE.
The current business was established in 1992 and was bolstered by the acquisition of Apoloco in 1996 and Fraser Williams Data Systems in 1999.
During the last eight years the firm has increased sales and profits, reaching revenues of £9.8 million in 2009, and focused on organically developing its product range and global operational infrastructure
Mr Reason added: “We have established a profitable, cash-generative business which is a leader in the niche market of early drug safety assessment.
“With fiscal and regulatory pressures driving the need for our solutions, we believe we now have a strong platform from which to achieve accelerated growth through the entry into complementary markets and geographies.
“The IPO will play a key part in helping us achieve these goals, raising our profile and providing access to the capital markets as we seek to further our growth through acquisitions.
“We look forward to the continued growth of Instem and a successful future as a public company.”