Aquis Exchange hopes to raise £32.1m and see shares in the company start trading on the AIM junior market on Thursday 14 June.
Founded in 2012, Aquis Exchange provides a pan-European cash equities trading exchange (Aquis Exchange) as well as matching engine and market surveillance technology for banks, investment firms, brokers and exchanges (Aquis Technologies).
The company offers trading in around 1,200 equities across 14 countries, has 28 trading members, 6 market makers acting as designated liquidity providers.
UNIQUE FEES CHARGING
What makes it a bit different is its charging structure. Unlike larger peers like the London Stock Exchange (LSE) and Deutsche Bourse whose fees are based on a percentage of transaction value, Aquis has a subscription model. It makes money based on ‘electronic messaging traffic,’ averaged over each month.
This means charging on the number of trades averaged over a month a trader makes, not the value.
The business has grown quickly but it is still loss-making. In calendar year 2017 the company saw revenues jump 65% but to a still tiny revenues £2m. It ran-up operating losses of £3.3m. That could change quite quickly if it can continue to take market share from rival. Aquis reckons it has just 1.9% of the pan-European market of continuous trading.
SELLING SHAREHOLDERS
But a large chunk of the cash the company hopes to raise will go to selling shareholders, including the Warsaw Stock Exchange and directors, worth about £20.1m. If all goes to plan that would leave about £12m of growth funding available, much of which will be invested in bolstered sales, marketing and product development, after IPO costs.
The new shares will be issued at 269p giving Aquis a market capitalisation of approximately £73m and an enterprise value of roughly £60m.
‘While still a small fish in a big pond, Aquis is rapidly growing,’ says Megabuyte analyst Rob Warensjo. ‘It will be interesting to see how the group navigates the public markets at such a nascent stage, as its focus turns to a new growth phase at a time of the broader push for greater levels of transparency.'
