A Durham University spin out company specialising in digital colour x-ray imaging has been attracting the attention of investors worldwide after its shares began trading on AIM, the London Stock Exchange’s international market for growing companies. Kromek raised £15m to help fund expansion and future growth in a successful, oversubscribed, flotation on 16 October that valued the company at £55m.
Kromek manufactures equipment and components for energy-sensitive x-ray imaging, based on cadmium telluride crystals and related materials.
The company was formed in 2003 to exploit technology originally developed in the Department of Physics at Durham University as part of a collaborative project led by the late Professor Andy Brinkman.
Kromek operates in global markets for gamma ray detection in the nuclear industry, security screening and medical imaging. Its liquid explosives detectors for use in airport security are being adopted by a growing number of UK and European airports.
Spin out companies form high-profile vehicles for translating university research into the industrial sector. The university receives shares in a spinout in exchange for access to intellectual property rights (IPR) generated by university research.
Investors receive shares in exchange for cash and business expertise. Under the right circumstances, this combination of university IPR, cash and business expertise can create successful businesses with high growth potential.
Professor Brian Tanner, Dean for University Enterprise and a member of the original project team that led to the formation of Kromek, said: “Creating a spin out company is one way, but not the only way, of commercialising fundamental research.
“We have productive research relationships with many existing companies, including global players such as Procter & Gamble and leading energy firms, as well as high-technology small to medium size enterprises.”
Kromek’s shares rose 17 per cent to 59.75p when it made its debut on the market. The firm plans to use the floatation proceeds for product development and expansion of its sales team to support future growth. The company employs 60 people at its headquarters in NetPark, Sedgefield, County Durham, in northern England and another 40 at plants in the United States.
Kromek Chief Executive and Durham University alumnus, Dr. Arnab Basu, said: “We are delighted with our oversubscribed fundraising. After many years developing the business and our technology, Kromek is ready to begin harvesting value by seizing the opportunities to sell our technology and products into the medical imaging, security screening and nuclear detection markets.
“We will invest in the company's intellectual property portfolio and manufacturing capabilities, whilst accelerating our commercial activities in our chosen markets. We will continue to develop relationships with some of the world leading companies in our target sectors. We welcome our new shareholders and I look forward to working with them in order to achieve Kromek's full potential.”
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