Float is big hit for GPS company

The initial public offer for shares in global positioning technology company Rakon closed yesterday, with demand outstripping supply many times over, the company said.

Managing director Brent Robinson said the company was extremely pleased with the level of interest shown in the offer of 41,250,000 shares, valued at $66 million.

"More than 1800 investors have applied for shares, including a significant number of staff," Robinson said.

The $1.60-a-share price was set after a bookbuild of retail brokers and institutions.

During the float process, the price had risen from an initial indicative range of $1.10-$1.40-a-share due to heavy demand for the stock.

Auckland-based Rakon designs and manufactures the high-performance crystals and oscillators used in GPS products.

Jonathan Oram, director capital markets for the offer's lead manager UBS New Zealand, said the high level of interest from investors was a strong endorsement for the company.

"Rakon's IPO demonstrates that the New Zealand capital markets are capable of valuing high growth companies," Oram said.

About 60 per cent of the stock will go to institutions, with the remainder going to retail investors, Oram said.

Rakon will have a market capitalisation of about $170 million when it lists on the NZX on Tuesday.

The money raised from the listing would fund growth through new product development, investment in manufacturing equipment and factory expansion.

Rakon plans to expand its 500-strong workforce by about 30 people as production and marketing expand.

The company was founded in 1967 by Warren Robinson, who made quartz crystals by hand in his basement for the VHF and marine industries.

Existing investors include Navman founder Peter Maire and his partners, who bought a 20 per cent stake in the company in November.

The prospectus showed Rakon was forecasting sales to increase by 24 per cent to $90.6 million next year.

This forecast increase was based on an exchange rate of US67c and would see net profit jump from $4.4 million to $7.2 million.

Rakon

$66 million float.

Shares at $1.60 each.

1800 investors applied for shares.

Market capitalisation of $170 million.

Lists on Tuesday.