Graham seeks US cash
Announcement posted by Graham Technology 20 Mar 2002
Floatation back on the agenda as software company moves, reveals Kristy Dorsey
Graham Technology, which is on the verge of securing a fresh 1.5m contract with a Dutch retailer, is looking at the possibility of raising venture capital in the US prior to a floatation in about three years time.
Speaking at the companys new headquarters at the former India Tyre factory at Inchinnan, Renfrewshire, chief executive Iain Graham said the main reason for courting US funds was the need for marketing muscle in that country. Although the privately owned Scottish firm will post lower sales and profits for the financial year closing at the end of the month, it is still well placed relative to many of its peers in the battered tech sector.
America is a big place, and I think we need to be on the west coast as well as in Boston, said Graham. For America I want to work with the venture capitalists to help you network and do your marketing.
The company - which specialises in developing software to manage interaction between businesses and customers - is currently wholly-owned by its management and employees. The new headquarters has ample room for more staff as Graham Technology embarks on an aggressive expansion programme.
The company is aiming to raise its sales from an estimated 15m in the coming year to 100m by 2005. It intends to do this by expanding sales into London, Europe, the US and Asia Pacific under the leadership of international sales and marketing director Mark Camilleri. Australian-born Camilleri says the best thing that happened to Graham Technology was the global economic slow-down. This will allow the company to compete against larger rivals such as SAP, Siebel and Oracle by forcing customers to closely examine the return they get on their IT investment.
While the sector heavyweights can rely on the wow factor of their presentations skills and the kudos of their corporate identity, Graham maintains its technology regularly produces one of the highest return on investment (ROI) ratios. As clients have slashed spending across the board, ROI has become an increasingly powerful selling tool.
Chief executives and everybody else are now under pressure to justify their expenditure, and that plays right into our sweet spot, Camilleri said. We rarely do not get a meeting based on that kind of speak.
The new Dutch contract will be Grahams second new business win in that country in recent weeks, following a January agreement to supply the companys GT-X7 platform to Dutch telecoms operator KPN Mobile.
Holland will therefore become the preliminary focus for Grahams expansion into Europe. Although the company does have customers in other countries on the continent, its Dutch sales are among the strongest.
In addition to turnover targets, the management team has also laid out provisional plans to go for a market floatation in about three years.
Graham Technology has flirted with a listing before, having said in mid-2000 that it hoped to become a quoted concern within 18 months time. Those plans were put on hold amid the technology fallout of 2001.
Whether the company goes ahead with raising venture capital prior to its new floatation deadline will depend to a great extent upon the amount of cash on offer from an investment sector still nursing heavy tech-related losses. Although Graham says he is in no desperate need of cash, he doesnt want to give equity away cheaply.
No final decision has been made as to how much of equity might be sold, but the starting point for such deals is typically in the 25% to 30% range. Talks are currently taking place with Merrill Lynch and Lehman Brothers.
Speaking at the companys new headquarters at the former India Tyre factory at Inchinnan, Renfrewshire, chief executive Iain Graham said the main reason for courting US funds was the need for marketing muscle in that country. Although the privately owned Scottish firm will post lower sales and profits for the financial year closing at the end of the month, it is still well placed relative to many of its peers in the battered tech sector.
America is a big place, and I think we need to be on the west coast as well as in Boston, said Graham. For America I want to work with the venture capitalists to help you network and do your marketing.
The company - which specialises in developing software to manage interaction between businesses and customers - is currently wholly-owned by its management and employees. The new headquarters has ample room for more staff as Graham Technology embarks on an aggressive expansion programme.
The company is aiming to raise its sales from an estimated 15m in the coming year to 100m by 2005. It intends to do this by expanding sales into London, Europe, the US and Asia Pacific under the leadership of international sales and marketing director Mark Camilleri. Australian-born Camilleri says the best thing that happened to Graham Technology was the global economic slow-down. This will allow the company to compete against larger rivals such as SAP, Siebel and Oracle by forcing customers to closely examine the return they get on their IT investment.
While the sector heavyweights can rely on the wow factor of their presentations skills and the kudos of their corporate identity, Graham maintains its technology regularly produces one of the highest return on investment (ROI) ratios. As clients have slashed spending across the board, ROI has become an increasingly powerful selling tool.
Chief executives and everybody else are now under pressure to justify their expenditure, and that plays right into our sweet spot, Camilleri said. We rarely do not get a meeting based on that kind of speak.
The new Dutch contract will be Grahams second new business win in that country in recent weeks, following a January agreement to supply the companys GT-X7 platform to Dutch telecoms operator KPN Mobile.
Holland will therefore become the preliminary focus for Grahams expansion into Europe. Although the company does have customers in other countries on the continent, its Dutch sales are among the strongest.
In addition to turnover targets, the management team has also laid out provisional plans to go for a market floatation in about three years.
Graham Technology has flirted with a listing before, having said in mid-2000 that it hoped to become a quoted concern within 18 months time. Those plans were put on hold amid the technology fallout of 2001.
Whether the company goes ahead with raising venture capital prior to its new floatation deadline will depend to a great extent upon the amount of cash on offer from an investment sector still nursing heavy tech-related losses. Although Graham says he is in no desperate need of cash, he doesnt want to give equity away cheaply.
No final decision has been made as to how much of equity might be sold, but the starting point for such deals is typically in the 25% to 30% range. Talks are currently taking place with Merrill Lynch and Lehman Brothers.