SMARTRAC IPO goes ahead

19 July 2006

RFID manufacturer SMARTRAC has successfully placed 3.5 million shares from a capital increase as part of its initial public offering (IPO). The issue price was  €17 per share and the gross proceeds amount to €59.5 million. The company says it will receive net proceeds of approximately €51 million.

Trading in the company, whose inlays are used in the official passports of 13 countries including the US and France, will begin on 20 July on the Prime Standard of the Frankfurt Stock Exchange under the trading symbol ‘SM7’ and the ISIN ‘NL0000186633’.

The company says proceeds from the IPO will be used to fund further growth. “Our focus is on expanding production capacity for components in high-security RFID applications such as credit cards, bank cards and passports,” says Dr Christian Fischer, CFO, SMARTRAC.

The successful announcement of the IPO follows the decision made in June by the public prosecutor of Augsburg, Germany, to dismiss investigations into the alleged infringement of patent rights by SMARTRAC’s CEO, Manfred Rietzler. The company says it postponed the original IPO from March 2006 “In the interest of an orderly IPO process, and in order to protect investors.

Originally, the company had planned to offer 4 million ordinary shares, of which 3.5 million were from a capital increase and 0.5 million from existing shareholders. “In light of the current situation in the capital markets, the existing shareholders have agreed not to sell any shares. Therefore, the amount of shares placed in the offering has been reduced from 4 million to 3.5 million,” says the company.

Around 99% of the shares were allocated to international institutional investors. The remaining 1% was allocated to retail investors.

“We are satisfied with the results of the placement. As a profitable growth company, SMARTRAC has a business model that is convincing, even in an extremely difficult capital market environment,” says Manfred Rietzler and Dr Christian Fischer.