RCS - Sondrel (Holdings) - Intention to Float on AIM

KKR & CoAnnouncement

07/10/2022 08:15

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RNS Number : 0945C  Sondrel (Holdings) PLC  07 October 2022

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FORM PART OF ANY OFFER TO ISSUE OR SELL, OR ANY SOLICITATION OF ANY OFFER TO
SUBSCRIBE OR PURCHASE, ANY INVESTMENTS IN ANY JURISDICTION.

 

THIS ANNOUNCEMENT CONSTITUTES A FINANCIAL PROMOTION FOR THE PURPOSES OF
SECTION 21 OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (AS AMENDED) AND HAS
BEEN APPROVED BY CENKOS SECURITIES PLC WHICH IS AUTHORISED AND REGULATED BY
THE FINANCIAL CONDUCT AUTHORITY.

 

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the basis of, or be relied on in connection with, any contract or commitment
whatsoever. Investors should not subscribe for or purchase any securities
referred to in this announcement except on the basis of information in the
admission document (the "Admission Document") to be published by Sondrel
(Holdings) plc, in connection with the proposed admission of the ordinary
shares in the capital of the Company to trading on AIM, a market operated by
London Stock Exchange plc ("Admission"). Copies of the Admission Document
will, following publication, be available on the Company's website at
www.sondrel.com (http://www.sondrel.com) .

 

 

 

7 October 2022

 

Sondrel (Holdings) plc

('Sondrel', the 'Company' and together with its subsidiaries the 'Group')

Intention to Float on AIM

Sondrel (Holdings) plc, the fabless semiconductor business providing turnkey
services in the design and delivery of 'application specific integrated
circuits' ("ASICs") and 'system on chips' ("SoCs") for leading global
technology brands, is pleased to announce its proposed admission to trading on
AIM ("Admission") and proposed placing, conditional on, amongst other things,
Admission (the "Placing") of 36,363,636 new ordinary shares (the "Placing
Shares") of £0.001 pence each ("Ordinary Shares") at a price of 55.0 pence
per Ordinary Share (the "Placing Price").

The Placing received strong support from institutional investors and will
raise a total of £20.0 million, before expenses.  Cenkos Securities plc
("Cenkos") is acting as Nominated Adviser, sole broker and sole bookrunner to
the Company.

The Company is seeking Admission in order to raise new equity to:

·    increase the number of engineers it employs;

·    invest further in developing its Architecting the Future IP
platforms;

·    accelerate sales in the USA and in other geographies; and

·    strengthen the Group's balance sheet in, inter alia, the delivery of
project based designs and customer supply management contracts.

 

Admission will also help to raise the Group's profile as a leading designer
and deliverer of complex ASICs/SoCs.

KEY HIGHLIGHTS

Sondrel is a UK founded and headquartered fabless semiconductor business
providing turnkey services in the design and delivery of complex, high end
ASICs and SoCs for leading global technology brands. Sondrel's capabilities
are provided to customers seeking competitive advantage by including
customised ASIC/SoC devices enabling differentiation of their end products
when addressing fast growth technology megatrends.

 

 

Delivering designs down to 5 nanometre process nodes and is now working on 3
nanometres

·    This level of engineering capability is limited to Sondrel and a
small number of Asian competitors and positions Sondrel to benefit from
megatrends driving the increasing use of ASICs globally and the production of
products utilising increasingly complex design geometries.

 

·    Positioned to benefit from the geopolitical and business drive to
shorten geographically stretched and complex supply chains.

 

Geographic reach in fast-growth end markets

·    Sondrel provides leading edge ASIC/SoC designs to a global customer
base in advanced end markets with significant structural growth drivers
including high performance computing, automotive, artificial intelligence,
VR/AR, video analytics, image processing, mobile networking and data centres.

 

·    Previous designs have been included in well-known products such as
Apple iPhone, Sony PlayStation, Meta's Oculus Quest virtual reality headset,
Samsung, Google and Sony smartphones, JVC prosumer camcorders and Tesla and
Mercedes-Benz cars.

 

 

Deeply rooted within the semiconductor industry

·    Established relationships with semiconductor IP and electronic design
automation ("EDA") providers, materials and equipment companies and
fabrication partners. Sondrel has a long-standing partnership with and
capability approval from Arm; is one of only 22 global partners in TSMC's
Design Centre Alliance; and has comparable relationships with Samsung, and
Global Foundries.

 

·    Sondrel is able to provide customers with the ability to de-risk the
design of ASICs/SoCs through the use of Sondrel's "Architecting the Future" IP
platforms.

 

Full-service product for customers seeking a reliable route to market

·    Sondrel's customers are able to differentiate their end products with
Sondrel's market leading design capabilities at the forefront of technology
whilst also leveraging Sondrel's expertise and relationships throughout the
semiconductor industry. In doing so, Sondrel's customers are able to remove
the requirements for multiple counterparties in the ASIC/SoC supply chain and
for supply chain management.

 

·    With OEMs and OEM suppliers increasingly focused on semiconductor
supply chain resilience and efficiency, customers are able to contract Sondrel
as a single counterparty in the design, supply chain management and production
of ASIC/SoC devices.

 

Strong track record

·    Sondrel has grown over a period of more than 20 years and delivers
complex ASIC/SoC designs for a wide range of leading multi-national corporate
customers.

 

·    Sondrel has delivered revenue growth from inception to 31 December
2021 at a CAGR of 20 per cent. As at 31 July 2022, the Group's pipeline of
revenue opportunities stood at more than £300 million 1  (#_ftn1) excluding
potentially material related production and supply revenues.

 

Clear growth strategy

·    The Directors have ambitions to grow revenues to over £100 million
in the medium term.

 

·    Sondrel's organic growth strategy is focused on increasing its
engineering headcount and investing in IP to further enhance its competitive
position, accelerating its growth in key geographies including the USA and
Asia.

 

Highly skilled and experienced team

·    Sondrel has a team of 137 engineers that are located across 5 design
centres globally; the UK, USA, China, India and Morocco. This enables Sondrel
to be one of only a handful of companies worldwide with the scale, capability
and strength of industry relationships to deliver projects in leading
technologies.

 

·    Sondrel has a proven and experienced founder-led management team.

 

Admission and commencement of dealings on AIM are expected to take place at
8.00 a.m. on 21 October 2022, under the ticker "SND".  Based on the Placing
Price, the market capitalisation of the Company will be approximately £48.1
million on Admission.  On Admission, the Company will have 87,461,772
Ordinary Shares in issue and a free float of approximately 41.1 per cent.

 

CURRENT TRADING AND PROSPECTS

Since the year ended 31 December 2021, the Group has traded strongly in
receiving new customer orders with an aggregate value of £19.4 million in the
six months ended 30 June 2022, including securing and commencing work on a
material turnkey engagement in Q2 2022 for a multi-billion dollar European
customer. Unaudited Group revenues generated in the six month period ended 30
June 2022 of £8.0 million were significantly ahead of the prior period, with
full year revenues generated in the full year ended 31 December 2021 of £8.2
million.

Given the positive momentum in relation to the Group's evolving business model
and the Directors' positive assessment of the strength of the Group's growth
strategy, the Directors have confidence in the Group's prospects for the
current and upcoming financial years.

 

Graham Curren, Chief Executive Officer of Sondrel, commented:

"We are delighted to announce our intention to float on AIM as this represents
a new and exciting chapter in the Group's history, and the first material
external investment event in our history.

Sondrel is at the cutting edge of our industry, delivering designs at 5
nanometres and below, a level of engineering that only a handful of companies
can match.  We are well positioned to benefit from a number of industry and
geopolitical megatrends and believe we can be a true UK technology success
story as a public company.

The IPO will provide us with the chance to raise the Group's profile as a
leading designer and deliverer of complex ASICs/SOCs and allow the Group to
reach its ambition of £100 million of annual revenue in the medium term. The
funds raised in the IPO will be used to increase the number of engineers we
employ, invest further in developing our Architecting the Future IP platforms,
accelerate growth in the USA and other geographies and strengthen the Group's
balance sheet.

I am incredibly proud to have reached this milestone and would like to thank
all of our amazing team that made this possible."

- Ends -

 

FOR FURTHER ENQUIRIES:

 

 Sondrel (Holdings) plc   Via Buchanan
 Graham Curren, CEO       Tel: +44 (0) 20 7466 5000
 Joe Lopez, CFO

 Cenkos Securities plc    Tel: +44 (0)20 7397 8900
 Ben Jeynes
 Katy Birkin

 George Lawson

 Hamish Waller

 Buchanan Communications  Tel: +44 (0) 20 7466 5000
 Chris Lane               sondrel@buchanan.uk.com

 Stephanie Whitmore
 Jack Devoy
 Abby Gilchrist

 

The ISIN of the Ordinary Shares will be GB00BJN54579, the SEDOL of the
Ordinary Shares BJN5457 and the Company's LEI number 984500D6E7L2A9A54935.

To find out more, please visit: www.sondrel.com (http://www.sondrel.com)

 

BOARD OF DIRECTORS

Executive Directors

Graham Curren - Chief Executive Officer (aged 58)

Graham founded Sondrel in 2002 after identifying a gap in the market for an
international company specialising in complex digital IC design.

Prior to establishing Sondrel, Graham graduated in Electronic Engineering from
Leeds University and worked in both ASIC design and manufacturing before
joining electronic design automation ("EDA") company, Avant Corporation.
There, he managed the technical and marketing teams across EMEA, supporting
products across the whole range of IC design.

In 2010, Graham accompanied the UK prime minister at the time, David Cameron,
in his business delegation to China. He also acted as a non-executive director
for the China-Britain Business Council between 2011 and 2017.

 

Jose ("Joe") Lopez - Chief Financial Officer (aged 57)

Joe joined Sondrel in April 2019. His career began as a Business Services
Manager for Grant Thornton LLP between 1993 and 1999 where he qualified as a
Chartered Accountant.

After leaving Grant Thornton, Joe worked in a variety of directorship roles
and has over 12 years' experience as a Chief Financial Officer, ranging from
start-ups to corporate multi nationals. Prior to joining Sondrel, Joe was
Finance Director of ShopperTrak Limited, a provider of data analytics aimed at
helping retailers improve their in-store customer experience, between 2012 and
2017, before joining Airways Aviation Academy Limited as Chief Financial
Officer for two years.

 

Non-Executive Directors

Nigel Vaughan - Independent Non-Executive Chairman (aged 71)

Nigel joined the board of Sondrel in 2011. He has 30 years of international
Board level experience acting for businesses in both an executive and
non-executive capacity. He has held Board level positions in businesses of
varying sizes, including UK public limited companies and US multinationals,
and he also built an early-stage business, Sifam Limited, that was sold for
US$100 million after 7 years.

He most recently acted as non-executive director of Quantex-Arc Limited
between 2018 and 2021. In addition to founding and owning a management
consulting business, Vaughan Management Solutions Limited, Nigel currently
also acts as Chairman to the Global Advisory Board of the Walsn Group.

 

Gordon Orr - Independent Non-Executive Director (aged 60)

Gordon currently acts as a Senior Advisor to management consultancy firm,
McKinsey & Company, having previously acted as Chairman of its Asia
division. Gordon also sits on the boards of Chinese multinational technology
company, Lenovo Group Limited, and conglomerate, Swire Pacific Limited. In
addition, he works with the CEOs of a number of China's globalising companies,
is an advisor to Oxford University and Harvard Business School in Asia and is
a Board Member of the China Britain Business Council.

Gordon spent the majority of his career at McKinsey & Company having
joined in 1986. He opened McKinsey's Beijing office in the early 1990s and led
its Greater China practice for many years and McKinsey Asia between 2009 and
2014. Gordon was on McKinsey's global board of directors between 2003 and 2015
with responsibilities for Asia, Governance and Risk, before retiring from the
firm.

 

Sherry Madera - Independent Non-Executive Director (aged 48)

Sherry is currently Mastercard's Senior Vice President of Global Public Policy
and Government Affairs. A Canadian and British national, Sherry joined
Mastercard from the London Stock Exchange Group where she held the position of
Chief Industry & Government Affairs Officer. She has also worked for the
City of London Corporation where she was Economic Ambassador and Special
Advisor to Asia, and also acted as a Minister-Counsellor at the British
Embassy in Beijing, responsible for promoting trade and investment between the
UK and China.

Recognised as an expert on green and sustainable finance as well as on data
policy, Sherry continues to hold the role of Chair of the Future of
Sustainable Data Alliance, a global alliance dedicated to working with the
financial industry to use data to build a sustainable future.

 

Adrian Carey - Independent Non-Executive Director (aged 64)

Adrian has more than 35 years of board experience across listed, AIM, private
equity, venture backed and private businesses, primarily in the technology,
legal and educational service sectors. Adrian acted as CEO for three companies
over a 17 year period, prior to which he was a finance director, venture
capitalist and Chartered Accountant. He most recently acted as Executive
Chairman for AIM quoted Melorio plc before being appointed as a non-executive
director until it was bought by Pearson plc in June 2010.

Adrian has had significant additional non-executive experience, including
acting as a non-executive director for Impellam Group and, more recently,
Oxford Metrics plc, both quoted on AIM. He currently acts as a non-executive
director for Blacktrace Holdings Limited.

 

 

Important Legal Information

The contents of this announcement, which has been prepared by and is the sole
responsibility of the Company, have been approved by Cenkos Securities Plc
("Cenkos") solely for the purposes of section 21(2)(b) of the Financial
Services and Markets Act 2000 (as amended).  Cenkos, which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority, is
advising the Company and no one else in relation to the proposed Issue and
Admission (each as defined below), and will not be responsible to anyone other
than the Company for providing the protections afforded to the clients of
Cenkos or for providing advice in relation to the Issue or Admission or any
transaction or arrangement referred to in this announcement.

 

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The Ordinary Shares of the Company have not been and will not be registered
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"qualified investors" within the meaning of Article 2(e) of the Prospectus
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available.

 

The information in this announcement is for background purposes only and does
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This announcement does not constitute a recommendation concerning the
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Admission Document in the section entitled "Risk Factors". New factors may
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The Company and Cenkos expressly disclaim any obligation or undertaking to
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actual results or any change in the assumptions, conditions or circumstances
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The information and opinions contained in this announcement are provided as at
the date of the announcement and are subject to change without notice.
Neither the Company nor Cenkos , or any of their respective parents or
subsidiary  undertakings, or the subsidiary undertakings of any such parent
undertakings, or any of such person's respective directors, officers,
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announcement.

 

 

 

 

 1  (#_ftnref1) Based on Sondrel's internal sales forecasting system reports

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