London's AIM - U.S. Company IPO and Secondary Offering Activity - 2005 to 2007

Highlights

• £2.1b raised in London Stock Exchange AIM IPOs for 62 U.S. companies listed on London's AIM across 20 industries
• Pace of secondary offerings for U.S. companies listed on London's AIM increases from £105m to £180m to £260m; totaling £545m
• 22% of U.S. company listings on the London Stock Exchange's AIM included selling shareholders
• U.S. accredited investors and QIBs participate in London AIM IPOs, provide 20% of IPO and secondary funds raised on London's AIM

London AIM IPOs

The 62 U.S. companies that completed IPOs on London's AIM during the last three years raised an average of £34 million with 75% raising between £7.5 million and £100 million.

  

Over the last three years, the average London Stock Exchange AIM IPO raised £27 million; however, it’s important to distinguish between IPOs for ‘operating companies’ listing on London's AIM and ‘investment vehicles’.  The table below illustrates the dramatic impact that London AIM IPO funding of ‘investment vehicles’ had on the market.

Entire Market 2005 - 2007	Number of London AIM IPOs	Gross Funds Raised (in £ billions)	Average Funds Raised (in £ millions)
‘Investment Vehicles’	206	13.01	63
‘Operating Companies’	589	8.20	14
Total	795	21.21	27

In contrast, the next table shows that a greater proportion of U.S. company listings on London's AIM were for operating companies listed on the London Stock Exchange's AIM, raising an average of £24 million, 70% more than the market average of £14 million.

U.S. Companies 2005 - 2007	Number of London AIM IPOs	Gross Funds Raised (in £ billions)	Average Funds Raised (in £ millions)
‘Investment Vehicles’	12	0.92	77
‘Operating Companies’	50	1.19	24
Total	62	2.11	34

London AIM Industry Dispersion

The 20 industries in which the 62 U.S. companies listed on London's AIM operate are quite diverse; however, there is a concentration of oil and gas producers listed on London's AIM in Texas and concentrations in technology, including; digital media, biotech and cleantech, between Boston and Washington D.C., in Florida and in California.  In fact, the “Automobiles & Parts” companies listed on the London Stock Exchange's AIM in the chart below are fuel cell developers or zero emissions vehicle manufacturers.

  

London AIM Selling Shareholder Activity

14 of the 62 U.S. companies that completed IPOs on the London Stock Exchange's AIM during the last three years included selling shareholders who were often either founders of the company, longstanding members of executive management or the board of directors, commercial partners who had made a strategic investment in the company or VCs/PE Firms who invested in and nurtured the company for several years prior to its London Stock Exchange AIM IPO.  While selling shareholders are most common in conjunction with a London AIM IPO, U.S. company insiders have sold in the aftermarket on London's AIM in organized transactions on three occasions; twice as part of secondary offerings on London's AIM and once on a standalone basis.  In all three instances, the companies listed on London's AIM were performing exceptionally well with the organized insider selling driven by a need to “satisfy excess demand” for the company’s London Stock Exchange AIM-listed shares.

U.S. London AIM Accredited Investor and Qualified Institutional Buyer (QIB) Activity

U.S. accredited investors and QIBs are permitted to participate in London Stock Exchange AIM IPOs and secondary offerings on London's AIM.  In fact, they provided 20% of the London AIM IPO funding, or £425 million, for the 62 U.S. companies that completed IPOs on London's AIM during the last three years.  They also provided £100 million for U.S. company secondary offerings on London's AIM, again 20% of the total, over the last three years.

London AIM Secondary Offerings

The secondary offering market for U.S. companies listed on the London Stock Exchange's AIM has been strong, increasing from £105 million to £180 million to £260 million from 2005 to 2007 for a CAGR of 58%.