McDonnell Information Systems Group Plc of Hemel Hempstead, Hertfordshire, has finally issued its pathfinder prospectus for flotation. The move, hoped to raise 107m net, is designed to reduce the 140m debt incurred from the management buyout last March, and to give it a strong balance sheet to exploit growth markets. It will also redeem existing preference shares. As part of the deal there will be an employee share ownership option, where each employee will be given under 500 worth of shares. McDonnell, which is floating through a placing and offer for sale, will use NatWest Wood Mackenzie & Co as brokers. The deal will be underwritten by Baring Brothers & Co. The price puts a value of 250m on the company. McDonnell will seek to expand its Pro-IV development tool licensing and applications development operations with its increased working capital, providing it with a renewed push into the public sector to take advantage of the market-testing initiative. Over the past three years, turnover has fallen by 13.6% in total to 148.5m for the year ending December 31 1993, while profit has risen 24.6% to 22.3m. The majority of turnover still comes from the public sector, 58.1%, and in geographical terms the domestic UK market still contributes 75%. Turnover has fallen steadily over the past three years because of the fall in hardware sales, although the operating margin has grown – it was 15% this year, 12% the year before and 10.4% the year before that. The firm, which is offering facilities management services, will keep research and development at a rough 11.8% of total turnover. Products being developed under Pro-IV include the HISS, HOMER and HR hospital administration systems, a new generation of police computer products and a new multilingual library product. Dealing in shares is due to start on March 24.
