Intention to Float on AIM
07 October 2022
Sondrel (Holdings) plc, the fabless semiconductor business providing turnkey services in the design and delivery of 'application specific integrated circuits' ("ASICs") and 'system on chips' ("SoCs") for leading global technology brands, is pleased to announce its proposed admission to trading on AIM ("Admission") and proposed placing, conditional on, amongst other things, Admission (the "Placing") of 36,363,636 new ordinary shares (the "Placing Shares") of £0.001 pence each ("Ordinary Shares") at a price of 55.0 pence per Ordinary Share (the "Placing Price").
The Placing received strong support from institutional investors and will raise a total of £20.0 million, before expenses. Cenkos Securities plc ("Cenkos") is acting as Nominated Adviser, sole broker and sole bookrunner to the Company.
The Company is seeking Admission in order to raise new equity to:
- increase the number of engineers it employs;
- invest further in developing its Architecting the Future IP platforms;
- accelerate sales in the USA and in other geographies; and
- strengthen the Group's balance sheet in, inter alia, the delivery of project based designs and customer supply management contracts.
Admission will also help to raise the Group's profile as a leading designer and deliverer of complex ASICs/SoCs.
Sondrel is a UK founded and headquartered fabless semiconductor business providing turnkey services in the design and delivery of complex, high end ASICs and SoCs for leading global technology brands. Sondrel's capabilities are provided to customers seeking competitive advantage by including customised ASIC/SoC devices enabling differentiation of their end products when addressing fast growth technology megatrends.
Delivering designs down to 5 nanometre process nodes and is now working on 3 nanometres
- This level of engineering capability is limited to Sondrel and a small number of Asian competitors and positions Sondrel to benefit from megatrends driving the increasing use of ASICs globally and the production of products utilising increasingly complex design geometries.
- Positioned to benefit from the geopolitical and business drive to shorten geographically stretched and complex supply chains.
Geographic reach in fast-growth end markets
- Sondrel provides leading edge ASIC/SoC designs to a global customer base in advanced end markets with significant structural growth drivers including high performance computing, automotive, artificial intelligence, VR/AR, video analytics, image processing, mobile networking and data centres.
- Previous designs have been included in well-known products such as Apple iPhone, Sony PlayStation, Meta's Oculus Quest virtual reality headset, Samsung, Google and Sony smartphones, JVC prosumer camcorders and Tesla and Mercedes-Benz cars.
Deeply rooted within the semiconductor industry
- Established relationships with semiconductor IP and electronic design automation ("EDA") providers, materials and equipment companies and fabrication partners. Sondrel has a long-standing partnership with and capability approval from Arm; is one of only 22 global partners in TSMC's Design Centre Alliance; and has comparable relationships with Samsung, and Global Foundries.
- Sondrel is able to provide customers with the ability to de-risk the design of ASICs/SoCs through the use of Sondrel's "Architecting the Future" IP platforms.
Full-service product for customers seeking a reliable route to market
- Sondrel's customers are able to differentiate their end products with Sondrel's market leading design capabilities at the forefront of technology whilst also leveraging Sondrel's expertise and relationships throughout the semiconductor industry. In doing so, Sondrel's customers are able to remove the requirements for multiple counterparties in the ASIC/SoC supply chain and for supply chain management.
- With OEMs and OEM suppliers increasingly focused on semiconductor supply chain resilience and efficiency, customers are able to contract Sondrel as a single counterparty in the design, supply chain management and production of ASIC/SoC devices.
Strong track record
- Sondrel has grown over a period of more than 20 years and delivers complex ASIC/SoC designs for a wide range of leading multi-national corporate customers.
- Sondrel has delivered revenue growth from inception to 31 December 2021 at a CAGR of 20 per cent. As at 31 July 2022, the Group's pipeline of revenue opportunities stood at more than £300 million excluding potentially material related production and supply revenues.
Clear growth strategy
- The Directors have ambitions to grow revenues to over £100 million in the medium term.
- Sondrel's organic growth strategy is focused on increasing its engineering headcount and investing in IP to further enhance its competitive position, accelerating its growth in key geographies including the USA and Asia.
Highly skilled and experienced team
- Sondrel has a team of 137 engineers that are located across 5 design centres globally; the UK, USA, China, India and Morocco. This enables Sondrel to be one of only a handful of companies worldwide with the scale, capability and strength of industry relationships to deliver projects in leading technologies.
- Sondrel has a proven and experienced founder-led management team.
Admission and commencement of dealings on AIM are expected to take place at 8.00 a.m. on 21 October 2022, under the ticker "SND". Based on the Placing Price, the market capitalisation of the Company will be approximately £48.1 million on Admission. On Admission, the Company will have 87,461,772 Ordinary Shares in issue and a free float of approximately 41.1 per cent.
CURRENT TRADING AND PROSPECTS
Since the year ended 31 December 2021, the Group has traded strongly in receiving new customer orders with an aggregate value of £19.4 million in the six months ended 30 June 2022, including securing and commencing work on a material turnkey engagement in Q2 2022 for a multi-billion dollar European customer. Unaudited Group revenues generated in the six month period ended 30 June 2022 of £8.0 million were significantly ahead of the prior period, with full year revenues generated in the full year ended 31 December 2021 of £8.2 million.
Given the positive momentum in relation to the Group's evolving business model and the Directors' positive assessment of the strength of the Group's growth strategy, the Directors have confidence in the Group's prospects for the current and upcoming financial years.
Graham Curren, Chief Executive Officer of Sondrel, commented:
"We are delighted to announce our intention to float on AIM as this represents a new and exciting chapter in the Group's history, and the first material external investment event in our history.
Sondrel is at the cutting edge of our industry, delivering designs at 5 nanometres and below, a level of engineering that only a handful of companies can match. We are well positioned to benefit from a number of industry and geopolitical megatrends and believe we can be a true UK technology success story as a public company.
The IPO will provide us with the chance to raise the Group's profile as a leading designer and deliverer of complex ASICs/SOCs and allow the Group to reach its ambition of £100 million of annual revenue in the medium term. The funds raised in the IPO will be used to increase the number of engineers we employ, invest further in developing our Architecting the Future IP platforms, accelerate growth in the USA and other geographies and strengthen the Group's balance sheet.
I am incredibly proud to have reached this milestone and would like to thank all of our amazing team that made this possible."
FOR FURTHER ENQUIRIES:
Sondrel (Holdings) plc
Graham Curren, CEO
Tel: +44 (0) 20 7466 5000
Joe Lopez, CFO
Cenkos Securities plc
Tel: +44 (0)20 7397 8900
Tel: +44 (0) 20 7466 5000
The ISIN of the Ordinary Shares will be GB00BJN54579, the SEDOL of the Ordinary Shares BJN5457 and the Company's LEI number 984500D6E7L2A9A54935.
To find out more, please visit: www.sondrel.com
BOARD OF DIRECTORS
Graham Curren - Chief Executive Officer (aged 58)
Graham founded Sondrel in 2002 after identifying a gap in the market for an international company specialising in complex digital IC design.
Prior to establishing Sondrel, Graham graduated in Electronic Engineering from Leeds University and worked in both ASIC design and manufacturing before joining electronic design automation ("EDA") company, Avant Corporation. There, he managed the technical and marketing teams across EMEA, supporting products across the whole range of IC design.
In 2010, Graham accompanied the UK prime minister at the time, David Cameron, in his business delegation to China. He also acted as a non-executive director for the China-Britain Business Council between 2011 and 2017.
Jose ("Joe") Lopez - Chief Financial Officer (aged 57)
Joe joined Sondrel in April 2019. His career began as a Business Services Manager for Grant Thornton LLP between 1993 and 1999 where he qualified as a Chartered Accountant.
After leaving Grant Thornton, Joe worked in a variety of directorship roles and has over 12 years' experience as a Chief Financial Officer, ranging from start-ups to corporate multi nationals. Prior to joining Sondrel, Joe was Finance Director of ShopperTrak Limited, a provider of data analytics aimed at helping retailers improve their in-store customer experience, between 2012 and 2017, before joining Airways Aviation Academy Limited as Chief Financial Officer for two years.
Nigel Vaughan - Independent Non-Executive Chairman (aged 71)
Nigel joined the board of Sondrel in 2011. He has 30 years of international Board level experience acting for businesses in both an executive and non-executive capacity. He has held Board level positions in businesses of varying sizes, including UK public limited companies and US multinationals, and he also built an early-stage business, Sifam Limited, that was sold for US$100 million after 7 years.
He most recently acted as non-executive director of Quantex-Arc Limited between 2018 and 2021. In addition to founding and owning a management consulting business, Vaughan Management Solutions Limited, Nigel currently also acts as Chairman to the Global Advisory Board of the Walsn Group.
Gordon Orr - Independent Non-Executive Director (aged 60)
Gordon currently acts as a Senior Advisor to management consultancy firm, McKinsey & Company, having previously acted as Chairman of its Asia division. Gordon also sits on the boards of Chinese multinational technology company, Lenovo Group Limited, and conglomerate, Swire Pacific Limited. In addition, he works with the CEOs of a number of China's globalising companies, is an advisor to Oxford University and Harvard Business School in Asia and is a Board Member of the China Britain Business Council.
Gordon spent the majority of his career at McKinsey & Company having joined in 1986. He opened McKinsey's Beijing office in the early 1990s and led its Greater China practice for many years and McKinsey Asia between 2009 and 2014. Gordon was on McKinsey's global board of directors between 2003 and 2015 with responsibilities for Asia, Governance and Risk, before retiring from the firm.
Sherry Madera - Independent Non-Executive Director (aged 48)
Sherry is currently Mastercard's Senior Vice President of Global Public Policy and Government Affairs. A Canadian and British national, Sherry joined Mastercard from the London Stock Exchange Group where she held the position of Chief Industry & Government Affairs Officer. She has also worked for the City of London Corporation where she was Economic Ambassador and Special Advisor to Asia, and also acted as a Minister-Counsellor at the British Embassy in Beijing, responsible for promoting trade and investment between the UK and China.
Recognised as an expert on green and sustainable finance as well as on data policy, Sherry continues to hold the role of Chair of the Future of Sustainable Data Alliance, a global alliance dedicated to working with the financial industry to use data to build a sustainable future.
Adrian Carey - Independent Non-Executive Director (aged 64)
Adrian has more than 35 years of board experience across listed, AIM, private equity, venture backed and private businesses, primarily in the technology, legal and educational service sectors. Adrian acted as CEO for three companies over a 17 year period, prior to which he was a finance director, venture capitalist and Chartered Accountant. He most recently acted as Executive Chairman for AIM quoted Melorio plc before being appointed as a non-executive director until it was bought by Pearson plc in June 2010.
Adrian has had significant additional non-executive experience, including acting as a non-executive director for Impellam Group and, more recently, Oxford Metrics plc, both quoted on AIM. He currently acts as a non-executive director for Blacktrace Holdings Limited.
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