Tech firm up for sale following profit warning
LightwaveRF, the Birmingham-based provider of smart home solutions, has announced it is to conduct a formal review of the company, including a potential sale of the business, two weeks after it issued a profit warning.
The company, which has appointed BDO to carry out the review process, said the business would benefit from additional finance from a financial or larger corporate partner in order to support the board’s growth plan.
The move towards a sale follows the company’s profit warning earlier this month, when in it said that substantial progress made in annual revenue growth has been held back by a “number of one-off issues” in the last quarter of its financial year.
LightwaveRF said: “Whilst the company has been able to raise equity finance to support its development, the board believes that the recent fundraisings have taken up more of management’s time than desired, relative to the amounts raised and this has adversely impacted growth.
“The amount of new money raised has also meant that certain significant shareholders have been restricted in the amounts they could invest. The company, with the support of its existing shareholders, therefore wishes to take a wider approach to explore the alternatives for raising additional investment from new investors, to assist in accelerating the growth of the business.”
The company’s board said it “would prefer” a minority investment with the scope for existing investors to participate but recognises that given the current market capitalisation of the company, any meaningful investment could trigger the requirement for a whitewash under Rule 9 of the Takeover Code.
It said an investor may be prepared to invest in the company in its current form or the company may need to seek the support of its shareholders for the cancellation of the admission of its shares to trading on AIM in order to accommodate a significant investment. Alternatively, an investor may seek a controlling interest in the company.
