York-based engineering group Mount Engineering has raised £12.5 million through joining AIM in a bid to expand its business.

York-based engineering group Mount Engineering has raised £12.5 million through joining AIM in a bid to expand its business.

The strategy of the new group is to grow by making selective acquisitions and from the continual expansion of its product range. The IPO gives the company a market value of £12.7 million.

The Mount group primarily serves the oil, gas and petrochemical sectors through its three subsidiaries: Redapt Engineering Company, Raxton and Hi-Flow Valves. Last year the group made a profit of £773,000 on a turnover of £7.2 million.

The AIM flotation comes hot on the heels of the company’s acquisition of East Midlands-based engineering firm Raxton for £4.5 million.

Rawlinson & Hunter acted as Rule Three adviser, led by corporate finance partner Derek Rawlings. He said: “In order to arrange for the Group’s admission to AIM, a new company was formed, Mount Engineering, into which new funding was injected through an institutional placing conducted by Blue Oar Securities. Mount Engineering then made an offer to acquire the existing Mount Group of businesses.

Philip Ashworth, partner with Newcastle-based Dickinson Dees, handled the acquisition and IPO, he said: “This move will allow Mount Engineering to expand and build on its impressive portfolio of engineering companies.

“The fund raising has attracted the interest of a significant number of City institutions and I feel confident that a successful AIM listing will usher in a period of consolidation and growth,” he added. “Well-run engineering companies are flourishing within the relatively buoyant British economy and there is every indication that Mount will have a very healthy future.”

Richard Feltham of Yorkshire accountant Garbutt and Elliott said: “We are delighted to have acted alongside Dickinson Dees on three acquisitions for the Mount Group and as reporting accountant on the flotation.

“The strength of the management team and the specialist nature of the industry sectors the group serves combine to prove a potent force in the market. Assisted by the funds raised, these factors should provide plenty of opportunity for future growth.”

Ashworth added: “The AIM allows smaller companies to float shares with a more flexible regulatory system than is applicable to the main market. It is the perfect vehicle for Mount Engineering. Dickinson Dees has advised on many such new issues throughout its network of offices.”