Graphene producer’s IPO oversubscribed

The initial public offering of Applied Graphene Materials, a Durham University spinout, has been more than two times subscribed, indicating strong investor interest in the potential commercial exploitation of the so-called miracle material.

Since Graphene was isolated by scientists at Manchester University in 2004, it has attracted worldwide commercial and academic interest for its high-performance electrical, thermal and mechanical properties, triggering international competition to take advantage of the discovery.

AGM has developed a proprietary process for the manufacturing of high purity graphene nanoplatelets which, it says, enables it to produce the material cost efficiently and on a commercial scale.

It is seeking investment, though its IPO, to increase the capacity of its Teesside plant from one tonne of graphene to eight tonnes per annum over the next 18 months, so it can accelerate commercialisation with blue-chip partners.

The company was founded by Karl Coleman, professor of inorganic chemistry at Durham University, and spun out in 2010. It had hoped to raise £10m through its flotation, but strong institutional interest meant it could have raised more than twice that.

It is set to raise £11m at 155p per share when it floats on Aim on Wednesday, which would value the company’s equity at £26.2m.

AGM owns the intellectual property behind its process, which it says is based on sustainable, readily available raw materials.

Post flotation, Professor Coleman will have a 10 per cent stake. IP Group, an investor specialising in patent-based businesses, has reinvested and will hold 20 per cent. Two key northeast based funds, managed by IP Group and Northstar Ventures, have also retained stakes worth 14 per cent and 10 per cent. N+1 Singer is nominated adviser and sole broker to AGM.

AGM is the second Durham University spinout within weeks to float on Aim. Last month, Kromek, a world leader in materials identification using X-ray and gamma rays, raised £15m at 51p per share in an oversubscribed fundraising which valued its equity at £55m. The shares closed on Friday at 69p.

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