Evolution Capital advised Mobestar’s founding directors from 2004, when the company was formed, through to April 2006, when it was admitted to the AIM market with a listing valued at £38m.
Advice, planning and preparation
After appointing the requisite advisors – nomad, broker, auditor and legal counsel – the company was faced with a myriad of processes and regulatory compliance issues, yet to be met, before their admittance to AIM. Mobestar’s CEO Peter Richards said: “Taking a company public by floating its shares on AIM and signing up to all the rules and regulations demanded by the London Stock Exchange was a daunting prospect for our management team. We were completely unprepared for the volume of data which we had to prepare.”
Liquidity and cash flow validation, patent/intellectual rights allocation and strengthening mission-critical business processes were where Evolution Capital focussed their attention. They then proposed practical solutions in each of these identified areas – ultimately helping the company to implement them.
Evolution Capital provided Mobestar with:
- an AIM feasibility exercise prepared by a flotations expert
- a road map highlighting all the compliance issues and their proposed solutions
- accurate, LSE compliant management reporting systems
- an audit and report of the company’s products to ensure the necessary growth potential
- verification of all patents and intellectual property rights
- a strategic plan for the management team to enable delivery of the company’s key objectives
In order to satisfy the rigorous demands of the LSE membership, the company was also obliged to meet the equally strenuous requirements of the UK Listing Authority. Additionally, the company would ultimately be answerable to the Financial Conduct Authority, which keeps a close eye on all quoted companies. The result of this extra workload added to the burden on Mobestar’s board, which was still in the throes of scaling their business in a nascent market. Richards continues: “It is no exaggeration to say that floating a company on AIM put our directors and senior management under some of the highest pressure they have experienced. For example, I was locked in with our lawyers in a continuous three-week process while they examined each and every public statement, contract and partnership the company had made since inception. We clearly needed some extra help.”
The engagement was a success with all objectives and goals met. Evolution Capital assisted the company in achieving the requisite ‘pre-float’ deadlines, meeting all the necessary regulatory and statutory requirements. The management team had been well prepared by the time of the flotation and were ‘enabled’ to respond to the market fluctuations of a quoted company. Dealings for the company’s entire share capital of 50,000,000 ordinary shares commenced trading at £1.00 per share. Mobestar later completed a ‘dual-listing’ on the Frankfurt Stock Market allowing simultaneous trading in their shares on two major exchanges.
Rapid problem solving
Evolution Capital fulfilled each of the necessary requirements and helped the company overcome the logjam of challenges which could have caused a lengthy delay with the flotation. Peter Richards, CEO, said: “We needed some rapid problem solving if we were going to achieve our deadlines. Evolution Capital was indispensable in helping us, not only to prepare the ground but also in coming up with answers to some pressing problems. Without their input, we would never have got it over the line.”
Mobestar was a specialist B2B provider of mobile video services. The company decided to float in early 2005 after receiving an unprecedented demand for their services. Mobestar created a white-label application, mDate, a mobile ‘app’ that allowed large dating and community brands to utilise and monetise ‘mobile’ as a new channel for their browser-based users. Gaydar, White Label Dating and UK Dating were all signed up as early customers giving Mobestar 30,000,000 subscribers. The company was the ‘first to market’ with a suite of integrated technologies that overcame several technical hurdles such as anonymous calling, multiple/live video calling sessions and database synchronisation and were ahead of the competition by some quantum.