musicMagpie to raise £110m in AIM float
Recommerce business musicMagpie is to raise £110m when it lists on the Alternative Investment Market next week.
The business, which announced its intention to float in October, was founded in 2007 by current chief executive Steve Oliver and chief operating officer Walter Gleeson and has grown to employ more than 1,000 people.
The group has expanded from its Stockport base and now has operations in Atlanta, Georgia, in the US.
Its share placing will see selling shareholders receive £95m and the company £15m.
The company will have a market value of £208m when it launches at 193p-per-share next Thursday. It will have a free float of 53% with directors, senior management and other employees owning approximately 30%.
Oliver said: “We are thrilled that musicMagpie’s circular economy model has resonated so strongly with investors, and are delighted to have received such a high level of demand for the placing.
“Given the ongoing move to tackle the growing problem of e-waste and the fact that consumer attitudes towards buying refurbished consumer technology products are rapidly changing, we believe that there is significant potential for musicMagpie’s future growth prospects.”
musicMagpie is the UK’s number one consumer tech recycler, buying and selling refurbished electronics and second-hand computer games, consoles, DVDs and CDs.
It says the market for pre-owned consumer technology and physical media is worth approximately £9bn in the UK and US – and the former product category is expected to continue to grow at more than 10% per annum.
Revenue has increased from £115.5m in the year to November 2018, to £153.4m two years later. Earnings, as measured by EBITDA, has grown at a much faster rate, from £2.6m in its 2018 financial year to £13.9m last year.
In addition to its growing core business, the group recently launched three initiatives for which it sees significant potential: An innovative smartphone subscription/rental service, providing customers with a more affordable and flexible option than an outright purchase; the SMARTDrop kiosk concept – a fast, easy and free way for sellers to recycle phones for instant cash – with kiosks now being rolled-out in ASDA and Co-op branches; and Magpie Circular – a new corporate technology recycling service for businesses looking to increase their sustainability efforts whilst also generating income.
Oliver added: “In the UK alone, we estimate that people are sitting on around £16.5bn worth of technology that they no longer use, and that only a small percentage of consumer technology items are currently recycled.”
He added: “The listing on AIM of musicMagpie reflects not only the success that we have enjoyed to date, but also our confidence in our ability to capitalise on the favourable long term trends that continue to drive the company’s strong performance.”
Peel Hunt and Shore Capital are acting as joint bookrunners and joint brokers to the company in relation to the placing and admission to AIM. Peel Hunt is also acting as nominated adviser to the company and Deloitte is acting as financial adviser.
The Manchester office of Addleshaw Goddard advised musicMagpie on its IPO.
The 77-person AG team was led by partner Roger Hart and included Lucie Walker, David Auty, Jade Saunders, Mhairi Cruickshank, Philippa Carrington, Ben Farnworth, Jonathan Fletcher-Rogers, Katie Parker, Leah Fisher and Nina Goodman.
musicMagpie chief executive Steve Oliver is one of the headline speakers at In The Circle Yorkshire, a sustainability conference being curated by TheBusinessDesk.com.