PAC Partners has won the Corporate Deal of the Year for floating 3D printing company Titomic, whose shares have risen more than 10-fold since listing.
Titomic was the best performing listing of over $3 million on the Australian sharemarket over the past year, with the stock up 1395 per cent from the listing price of 20c.
The shares have climbed as high as $2.99 and were recently around $2.50.
Melbourne-based Titomic makes the world’s largest 3D metal printer, which has the potential to manufacture aircraft wings, ship hulls and rocket fuselages.
The printer, which is as large as a city bus, will be able in 22 minutes to print a bike that will be much stronger than current bicycles, says PAC Partners co-founder and managing director Craig Stranger.
However, Stranger says the company still has a way to go before its product is fully commercialised.
“There’s still a lot of hurdles for these companies before they’re a fully fledged large business,” he says. “It’s still at the relatively high end of the risk spectrum, but the market size is significant. A couple of institutional investors that have backed the story from listing really understand the size of the potential market.”
PAC Partners has worked with Titomic since before the float, helping to raise funds to start on the commercialisation of the technology before raising $6.5m in the IPO.
Stranger says one of the questions when floating a company is what’s the right amount of dilution for a company and a founder; essentially, where should the stock price be set and how much of the company will the founders retain. “Our thinking is that it’s better to leave some value on the table early, especially if you’re a business that needs capital,” he says.
“That’s what we always say to the companies: the IPO might be lower than you hoped, but you can always raise money at a high price in the future, and it’s so much easier to raise money when investors have made money.”
In fact, Titomic has since raised another $15m from investors.
Stranger says PAC Partners also seeks investors in an IPO who become long-term holders of a company rather than just trying to quickly flick it on.
“We get involved with the company and write detailed research to really help educate the investors about what the proposition is, and hopefully they’re there for the long term,” he says.
Founded five years ago, PAC Partners is a full-service brokerage with institutional and high-net-worth individual clients.
It has 25 staff in Sydney, Melbourne and Hong Kong. It has taken two other “ten-baggers” — companies that have increased tenfold in value — to market this year.
Baby-food maker Bubs Australia listed at 10c in January last year and its shares have risen close to $1; and medical cannabis company Cann Group listed last year at 30c and the price has since climbed as high as $4.
This year’s awards were also a reminder that not all successful IPOs maintain their success. Last year’s winner was delivery software company GetSwift, whose shares rose 300 per cent from their listing price of 20c.
GetSwift’s shares continued their rapid rise to as high as $4, but have since slumped to 34c as regulators and investors became concerned about whether the company had fully disclosed contract losses.
Source and original article: https://www.theaustralian.com.au/business/titomic-deal-a-licence-to-3dprint-money-for-pac-partners/news-story/6225cb46ae00f16e34938b751145850e