Online Kitchen King Joins Rush To Go Public
An entrepreneur who set up an internet-based kitchen appliances empire little more than a decade ago has picked advisers to assist with a £300m flotation on the London Stock Exchange.
Sky News understands that John Roberts, the founder of DRL Limited, which owns the website AO.com, has hired Jefferies and JP Morgan, the investment banks, to prepare a public listing that could take place by the end of the year.
The flotation of AO.com - known as Appliances Online until a rebranding several weeks ago - will aim to tap into buoyant demand for company listings amid improving sentiment about the UK economy.
Mr Roberts, who owns about 20% of the company, would be in line for a paper windfall of £60m if DRL is valued at £300m as City sources anticipate. He is being advised on the plans by Rothschild.
DRL, which made more than £8m in profit last year, sells directly to consumers and runs websites for major retailers including Boots, Marks & Spencer and Next. It also has a separate site for customer reviews and another called Appliance Deals.
The company changed the name of its principal operation to AO.com, Mr Roberts said, because the new brand was easier for customers to recall, and because it paved the way for a future expansion of the business beyond kitchen appliances.
Based in Bolton, Lancashire, DRL employs more than 400 people, many of whom will be in line for payouts if the company launches a successful flotation.
It is among a string of retailers, including House of Fraser and Card Factory, which are examining stock market listings despite the continuing gloom enveloping British high streets, with some analysts predicting the closure of hundreds more chains in the coming years.
Mr Roberts has hit back at the bosses of some retailers who have called for an online sales tax, arguing that such a measure would destroy entrepreneurial spirit in the UK.
The precise timing of his plans to take the company public are unclear, although DRL is attempting to tap into an appetite for new listings among investors which appears more buoyant than at any time since the 2008 financial crisis.
The Sunday Times reported today that Zoopla, the online estate agent majority-owned by the publisher of the Daily Mail, is among the prospective new arrivals on the stock market.
Last week, Sky News revealed that the owners of Saga were preparing to hire bankers to work on a listing that will see the over-50s travel and financial services provider's customers encouraged to buy shares.
Government ministers are also expected to announce towards the end of this week the long-awaited privatisation of Royal Mail through a stock market float, with investors being promised handsome dividends to entice them despite the ongoing threat of industrial action.