How Rarely The Good Guys Win
by Paul McGoldrick
Few people would admit it, but there are sections of our industry where
financial sleaze has been the name of the game for years; in front of investors'
noses just a handful of executives have walked away with many tens of millions
of dollars. It seems that the more overt some of these people are, the less
likely that they will ever be caught.
That is not the case with a great success story on the other side of The Pacific. Rakon Limited was founded in 1967 in Auckland, New Zealand, by Warren Robinson -- in his home, of course -- with the idea of making very good piezoelectric crystals for the burgeoning communications sector. In the early days, Warren hand-ground them himself, but he was a very early outsourcer and recognized the importance of the Asian market by opening a subsidiary in Singapore in the early 1970s.
Since then the company has grown and grown. When I met Warren at a conference -- in, maybe, 1975 -- the business was still just in crystals, but the era of synthesization was around the corner and the company latched onto both compensated VCOs and the other possibilities with the magic of PLLs, dividers and integers -- the whole game. Major contracts with cell phone manufacturers followed, and Rakon was fully ready for the era of the GPS receiver.
Now, fully 50% of the world's GPS receivers have a Rakon part, or module, in them, including the latest part to be released -- described as being as tiny as a baby's fingernail. (What a nice comparison … instead of the usual news release comparison to the size of a US coin.)
The company has essentially run out of its own money to further fund growth, and the current Managing Director, Warren's son Brent Robinson, decided to take the company public. With the kind of growth that has been seen, the international reputation, and the award of numerous export awards -- including one year where Rakon was the largest exporter from New Zealand in ALL commodity areas -- Rakon could have taken their IPO to any stock market in the world, but they decided to keep the operation fully kiwi and went for the New Zealand stock market (NZX).
The issue was heavily oversubscribed at the NZD1.60 price, but the family decided not to take in extra cash and still own a little over 41% of the company. Its first listing was at NZD2.20 and it closed the day at NZD2.36: a 37% premium in the first day, which put a NZD250 M capitalization value on the company.
Nice move for nice people: from the basement to the public company.
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