News Column

WANDISCO flying on HSBC's credit

August 6, 2014


SHARES in WANdisco rocketed as much as 10 per cent in morning trading yesterday, leading the FTSE 250 risers, after the Sheffield-based cloud software firm announced a $10m (5.9m) credit facility with HSBC to finance its continued expansion into so-called big data.

The financing, available until 2017, was seen as a vote of confidence in WANdisco as HSBC agreed to a very competitive interest rate of 1.2 per cent above Libor (London Interbank Offered Rate).

"The reliability, predictability and high growth potential of our subscription-based business model enabled us to secure this credit facility on attractive terms," said WANdisco's finance chief Paul Harrison.

"HSBC's involvement, alongside our equity investors, diversifies our financing options as we expand in the Big Data marketplace, a marketplace that is attracting corporate investments on a significant scale," added Harrison.

HSBC evaluated WANdisco's business as part of agreeing the new credit facility and its UK head of corporate banking Dan Howlett said: "We were sufficiently impressed with the company's growth prospects to make a commitment at investment-grade interest rates. This transaction shows our support for em-erging technology - a market we consid-er to have high potential."

UBS analyst Michael Briest said HSBC's agreement indicated the bank had done beep due diligence on the company that should reassure inves-tors.

"With the financing issue put on the back-burner, investors can focus on deal-flow," said Briest.

"While there have been no announcements since the second quarter bookings update, WANDISCO is working on a large pipeline, including some sizeable opportunities, we believe. While to-day's news will provide a boost to the shares, contract news is necessary for the shares to recover past highs."

WANDISCO's shares pared their morning gains to close up 2.5 per cent at 442.8p on London'sAlternative Invest-ment Market.

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Source: City A.M. (UK)

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