Aerospace drilling firm Tek4 is preparing for an initial public offering on London's junior market AIM, aiming to raise £20m at a valuation of approximately £40m. The Leicestershire-based company, which counts Rolls-Royce and GE among its clients, has appointed Panmure Liberum as bankers for the IPO, anticipated later this year.
Defence-Driven Demand
Tek4 designs and manufactures specialised drilling machines for aircraft and gas turbine components. Led by 40-year industry veteran Jason Duffin, the company has experienced a sharp increase in sales over the past year as conflict in Russia and the Middle East drives demand for its machinery. A new factory currently under construction near its Leicestershire headquarters is projected to boost production capacity by approximately 80 per cent, according to sources.
London Stock Exchange Boost
The listing offers some respite to the London Stock Exchange following a shortage of new IPOs and a wave of takeovers. Across the main market and AIM, only seven companies listed in the first six months of the year, raising £577m. Bankers are actively seeking defence-related businesses to bring to market as the government moves to strengthen the industry and investors capitalise on surging demand.
Government Support
The appointment of former defence secretary John Healey as chancellor last week is widely anticipated to signal a significant boost in funding for the sector. In his inaugural address as prime minister last Monday, Andy Burnham reaffirmed the UK's commitment to raising defence spending from 2.6 per cent of GDP to Nato's target of 3.5 per cent by 2035. Should the pledge be delivered, it would represent a real-terms uplift of more than £25bn in under a decade.
Panmure Liberum declined to comment. Tek4 also maintains offices in Carolina, reflecting its international reach. The IPO is expected to proceed later this year, subject to market conditions.
