Kelso raises £50m from Sepura float(3)

Turnaround specialist Kelso Place has raised nearly £50 million by floating a 25 percent stake in Sepura, a UK radio maker it bought out of administration for £1 five years ago.

UK-based investment group Kelso Place has completed the latest stage of its successful turnaround of Sepura, raising nearly £50 million (€74 million; $102 million) by floating about 25 percent of the Cambridge-based radio maker in London today.

Sepura placed about 35 million shares on the London Stock Exchange at 145 pence per share, generating proceeds of £49.4 million and valuing the whole company at about £200 million.

It continues an exemplary turnaround story for Kelso Place, who bought the terminals business of Simoco Digital out of administration in 2002, reportedly for just £1, and renamed it Sepura.

The business is now one of the world’s three biggest suppliers of TETRA radio terminals, secure platforms that are used by government and emergency services, after selling over 300,000 terminals to more than 600 clients. Last financial year the company recorded an operating profit of £7.6 million on sales of £52 million.

Since 2002 the management team has been led by Graham Matthews, while earlier this year Kelso also brought in Dr Phil Nolan, previously chief executive of Lattice Group and Eircom, as non-executive chairman. 

Goldman Sachs and Citi, the two banks running the offering, could raise another £4.9 million if they decide to exercise an over-allotment option of 3.4 million shares.

Kelso Place is currently spending a £100 million special situations fund that was raised from just four investors – co-founding principals John Drinkwater and Sion KearseyMichael Sherwood, the co-chief executive of Goldman’s business outside the US; and Jonathan Green, co-founder of hedge fund GLG Partners and an ex-Goldman banker. Drinkwater and Kearsey were also both at Goldman Sachs before Kelso.