IPO Watch: Trajan founder and CEO on bootstrapping his company all the way to the ASX
Link copied to
After some disappointing IPOs recently, the ASX finally saw one that was warmly welcomed by investors yesterday.
Trajan Group (ASX:TRJ) made a successful debut on the ASX, with its share price jumping from $1.70 to $2.03, before closing the day at $1.98.
The company, which is chaired by former Wallabies rugby captain John Eales, had raised $90 million in the IPO at a price of $1.70 a share, for a $220m market cap.
It has been a long but satisfying journey for founder and CEO Stephen Tomisich, who started the scientific instruments business with his wife Angela 10 years ago.
Speaking exclusively with Stockhead after the float, Tomisich said the couple decided to make the plunge and launch their own business after a long career in the industry spanning a combined 50 years.
“In 2011, our family had a kitchen table meeting at our home, and our daughter asked what could happen, and I said well, we could lose everything from this.”
The family agreed that they were wiling to take that risk, and the name Trajan, which was the name of a Roman soldier and emperor, was suggested by his daughter.
Tomisich and Angela decided to start and build the new venture through acquisitions of companies who already had the product and expertise.
“We knew that we weren’t inventors, so it was never going to be a case of going to a lab and inventing some new gee-whiz mousetrap,” Tomisich said.
“Instead, it was about acquiring some businesses, and use them as a starting point, and then leverage some skills and experiences from our corporate life.”
Trajan’s operations were initiated by the acquisition of two pathology consumables businesses in 2011 and 2013.
The 2013 acquisition for example, was the chromatography and liquid handling businesses of SGE Analytical Science – a business operating in the highly specialised analytical syringe sector.
Trajan has since had a strong acquisition record, having completed six more complementary acquisitions in the years following, which were all self-funded. A seventh acquisition, MyHealthTest, was just completed in May this year.
The company was able to self-fund these acquisitions through highly-disciplined budgeting and bootstrapping over the years.
“We only ever took modest salaries, we never took a dividend, and whatever money we had, we ploughed back into the business.”
“And that just compounded over the years and got us to the point where we are today, where we’re able to list and still be 60% shareholders.”
Trajan designs and manufactures a portfolio of precision consumable products, devices and solutions.
These products and solutions are used in the analysis of biological, food and environmental samples.
They also reflect the company’s mission to impact human wellbeing through scientific measurement.
Tomisich says the company is operating in both the healthcare and data technology sectors.
“There’s a collision of two worlds happening. Our vision is around the fact that our solutions will lead to data-based decision making in healthcare, and if we’re going to have data-based decision making, it can only be as good as the underlying data.”
“So what we’re focused on uniquely is all the physical tools that can impact the quality of that data,” Tomisich explained.
Its 450 employees serve a global customer base, which includes some of the world’s largest life science, biopharma, and analytical companies.
Trajan’s addressable market, which includes the global chromatography and mass spectrometry markets, is effectively in the billions of dollars.
With the fresh funds under its belt, Trajan will be entering its next phase of growth with a commercialisation pipeline, as well as newly identified acquisition targets.
“There are three key areas that we will deploy the new fund towards, and the largest area is going to be the continuation of our M&A program,” Tomisich said.
“The second thing is to enhance some of the production infrastructure through automated production processes. And the third area is to really accelerate the commercialisation of the suite of new technologies,” he added.
Asked why the future of Trajan might be bright for investors, Tomisich provided solid reasons.
“Clearly I am (as a founder and CEO) investing in it, so maybe that’s a good sign that we’re maintaining majority shareholding.”
“But if you look at our business history, what I like about it is its substance and underlying resilience.”
“We have 80-85 per cent of our revenues in recurring revenues, and those have proven to be resilient even right through COVID.”
“Unlike many healthcare stocks, it’s not a case of make or break with Trajan. We have a very healthy economic engine that underpins the business, but we still have the upside of that entrepreneurial and disruptive approach to new technology development, and I think it’s the combination of those that excites me about the business,” Tomisich said.