Current and former executives from Goldman Sachs are set to net millions of pounds when a specialist telecoms company that was bought out of administration for £1 lists on the London Stock Exchange.
Michael Sherwood, co-chief executive of Goldman Sachs in Europe, is one of four people with links to the investment bank who are set to profit from the initial public offering by Sepura, a company that makes mobile radio equipment for the emergency services.
The IPO is expected to take place next month, and Sepura’s main owners are expected to sell 25 per of their shareholdings. No new shares will be issued.
Sepura has an equity value of £250m, and does not have any debt, according to people familiar with the matter.
Mr Sherwood has a 25.6 per cent stake in Sepura, and should net £12.8m of cash proceeds from the IPO. His remaining stake should be worth £38.4m.
Jonathan Green, a former Goldman trader and co-founder of GLG, the large London hedge fund, also owns 25.6 per cent of Sepura, and should pocket a similar amount.
Sion Kearsey, a former Goldman managing director and co-founder of Kelso Place Asset Management, a private equity firm, has a 20.4 per cent stake and should net £10.2m of cash proceeds from the IPO. His remaining stake should be worth £30.5m.
John Drinkwater, a former Goldman executive and co-founder of Kelso Place, also owns 20.4 per cent and therefore should pocket £10.2m. His remaining stake should also be worth up to £30.5m.
Mr Kearsey and Mr Drinkwater bought Sepura out of administration in 2002, and since then Kelso Place has led efforts to revive the company. It generated £45.4m of revenue in 2006, and £10.4m of earnings before interest, tax, depreciation and amortisation. Sepura has paid out £10m of dividends since 2002.
Motorola, EADS and Sepura are the three main suppliers of secure mobile radio equipment for the emergency services and the military.
Sepura says it has customers in about 80 countries, and claims it will see strong demand for its products in the coming years as police and other agencies move from analogue to digital radio equipment for their communications.
Goldman and Citigroup are due to be the advisors on the IPO.