One to watch: Spotlight on Mortice

Friday, July 04, 2008 | Posted by: Grant Thornton
Categories: | Tags: India, investment, Mortice, India Watch

The admission to AIM of Indian facilities management company Mortice is a positive signal that Indian companies continue to offer attractive investment opportunities, despite shaky global conditions.

Mortice raised £5 million of new funds via a placing of 7.7 million ordinary shares on AIM in May. Its two operational companies, Tenon Property Services and Peregrine Guarding Private - which together constitute the Tenon Group - currently provide security services to over 450 customers from 51 locations in 19 of the 28 states in India, and are rapidly growing their facilities management business.

Having enjoyed an unbroken record of growth since its inception 13 years ago, Peregrine was looking for inward investment for a couple of reasons, namely to enable it to develop the Tenon facilities management business and to expand its services and geographic reach in order to take advantage of India’s growing corporate real estate sector.

A review of funding options pointed to the AIM market as being the most advantageous route, as Andrew Barker, Executive Director of Mortice and CEO of Tenon Property Services, explains:

“We looked at private equity funding, but a public listing was preferable as it brings with it the credibility of appropriate corporate governance. We also looked at the possibility of listing on other junior exchanges. Singapore’s Catalyst exchange could have been an option due to geographic location, but it was only established after Mortice had already embarked on the AIM route.

“We also opted for AIM because most of our customers are multinational companies and we wanted the credibility that AIM’s reputation and London location would give us. Also, we’re a small but growing company and AIM offered us a more efficient, simpler listing process and a platform for a more attractive valuation based on our future projections.”

Grant Thornton acted as nominated adviser to Mortice. Andrew Barker described the team’s approach as very structured and professional and commented on their ability to manage the large number of individuals and parties involved in the process, which took place across three time zones.

According to Fiona Owen, Partner and Head of the South Asia Group Capital Markets team at Grant Thornton, India could soon have more businesses listed on the London Stock Exchange than any nation other than the UK. “India’s rapid economic growth is creating a wave of fast-growing businesses, like Mortice, that are looking to fund expansion,” she says.

Andrew Barker concurs and points to the very positive response from Mortice investors: “Without exception, every one was impressed with our vision, the competitive edge we offer through a highly differentiated product tailored to local market needs, and the reputation of our team.” Building on the success of its AIM listing, Mortice expects, in the longer term, to seek a full float on a major exchange.