Heater group warms to idea of an AIM float
A technology company which makes flexible heaters for industry is considering an AIM floatation in a move that could value it at up to £20m.
Newcastle-based Key-Tech International has secured a global patent for a type of `porous heating' technology which is woven into fabrics and is already a £100m market worldwide.
The company is now in the process of securing patents for four different products using the battery-powered technology, including outdoor clothing and medical dressings.
The US and Europe, including the UK, will be the initial target markets.
Managing director Pat Ferguson said: "We have identified the players in the market place that we want to work with and will look to form strategic alliances where we sell directly to the manufacturer of the garments or licence the technology.
"The plan is to sign agreements with the major players this year.
"We have attended conferences with these companies and know their requirements so we hope that we would begin to generate sales in the final quarter of this year."
The company, which employs 45 staff in Newcastle and in the US, will need additional production and design staff and facilities which would cost around £2m.
Dr Ferguson acquired Key-Tech with debt and equity backing from North-East fund management company NEL in 1997.
NEL has just sold its one-third stake in Key-Tech back to the company's management for an undisclosed sum.
The company says it will now look to float off up to 10% of the company through an AIM listing or seek backing from other venture capitalists.
Dr Ferguson said: "NEL have limits to the amounts they can invest. We will look to make a decision on how we will fund the next phase of expansion in the next three to six months."
The company last year generated turnover of more than £3.5m and has targeted turnover of £4.5m in 2006, mainly from its supply of the £500m flexible heaters market, which heats electronics used in industrial uses such as ATM machines and telecom base stations.
The company's US subsidiary, which generated $2m last year through licensing agreements with the likes of IBM, Apple and Ericsson, is also poised for growth.
The subsidiary, which specialises printing techniques for computer keyboards, mobile phones and white goods, has a number of patents pending for printing 3-D images on surfaces.
NEL chief executive Barrie Hensby said: "We're very pleased to have played a long-term part in the growth and success of such an innovative regional business, and to have helped it reach a position from which it can expand even further into existing and new markets."