PlusNet goes for IPO to expand

Veteran ISP PlusNet is to go for an IPO to raise cash for broadband expansion and acquisitions.

The eight-year-old company could raise up to £35m by listing on AIM, but much of the deal is up in the air. Details will come after negotiations take place between the company and US-based parent Insight, a Nasdaq-listed IT products and services supplier.

PlusNet CEO Lee Stafford said in a statement: "The proposed flotation will further raise our profile with our partners and customers and within the industry, and assist us in developing our business as we look to become the broadband provider of choice for the experienced internet user in the UK."

The formal release, basically a statement of intent, said the company intended to take advantage of the growth opportunities associated with broadband "as well as to act as a consolidator within its industry".

Insight is a $3bn-a-year supplier of hardware and systems in North America and the UK and, to a small extent, a mostly US-based operator in the BPO area.

PlusNet became part of Insight when the US company bought PlusNet's former parent, Sheffield-based Choice Peripherals. It is one of only a handful of independent survivors from the great ISP boom of the nineties - the one before the dot-com boom.

The UK ISP currently has 165,000 customers, 60,000 of which are for broadband. It saw a turnover of £17.4m and a respectable profit of £1.8m for 2003, in part from keeping its marketing and sales expenditure low. Its customer base, both business and consumer, has grown five-fold in the last three years, mostly through referrals.