IPOs resurge as PE owners capitalise on improving company valuations
Initial public offerings (IPOs) raised close to EUR13bn in equity last year, matching the 10-year average in Europe in terms of both the number of deals and their total value, according to a report published by Standard & Poor's Ratings Services.
Titled "Inside Credit: Private-Equity Owners Lead The European IPO Resurgence As Company Valuations Improve," the report points out that private equity firms seeking exits from their investments are at the forefront of this revival in the IPO market.
Standard & Poor's European corporate research analyst Taron Wade says: "First, buoyant equity markets are making valuations attractive for companies looking to list. There are certain sectors where investors believe future growth prospects are strong, including commercial and professional services, health care, information technology, consumer staples, and cable.
"Second, there is pent-up demand from private-equity owners who have had few opportunities to exit their investments in recent years, and who want to take advantage of improvements in companies' operating performance. And third, there is optimism that Europe is emerging from recession and that the economy is starting to grow."
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