IPO

PwC expects surge in European IPOs to continue

Renewed vigour in the European IPO market has meant cash raised by companies going public in the first quarter of 2014 has exceeded Q1 values for the previous four years in aggregate, generating EUR11.4bn.

That’s according to PwC’s latest IPO Watch report.
 
This comes in the wake of 2013 European IPO proceeds increasing by 135 per cent to EUR26.5bn. 

 
The increase follows a busy final quarter of 2013 which saw over 100 companies successfully float and accounted for more than half the total proceeds raised for the whole year. 


 
Richard Weaver, capital markets partner at PwC, says: “This quarter is the first time since 2007 that we have witnessed such high volumes in the IPO markets across most of Europe. In the last two quarters we’ve seen larger deals, high subscription levels and good aftermarket performance, all signs of a wide-open IPO window. We are also still seeing a degree of residual caution in the market which means IPO candidates must still present a clear and well substantiated equity story if they want to be part of must-own deals.”   


 
The Euronext exchanges generated EUR2.1bn as telecoms group Altice raised EUR1.3bn in Amsterdam and OMX, the Nordic exchange, posted EUR1.9bn in Q1, largely attributable to the float of service company ISS which generated almost EUR1.1bn.  
 
In a clear example of improving economic conditions, the comparative period in 2013 saw less than EUR5m being raised by IPOs on either exchange. Spain also hosted two of the top 10 floats by value this quarter, the first sizeable IPOs in Madrid since the summer of 2011. 


 
London tripled the proceeds raised on its exchanges in Q1 2014, posting close to EUR5.9bn compared to EUR1.9bn in the same quarter of 2013.  Of the EUR5.9bn raised, the Main Market hosted 14 IPOs, raising EUR4.6bn while the remaining EUR1.3bn was generated on the resurgent AIM market. 


 
AIM has increased from six IPOs raising EUR43m in Q1 2013 to 18 IPOs generating EUR1.3bn. These included Boohoo – EUR364m (retail); DX Group – EUR244m (transportation); Manx Telecom - EUR189m (telecoms); and RM2 International - EUR166m (logistics). 

 

 
Across the London exchanges, eight retail IPOs, in the consumer services sector, raised EUR2.8bn, including Lenta, the largest retail IPO in Europe in Q1 2014. The largest London IPO came from the property sub sector when Kennedy Wilson Europe Real Estate raised EUR1.0bn.   


 
Mark Hughes, capital markets partner at PwC, says: “Retail has been the story of the quarter, especially in London.  We are seeing a number of mixed technologies coming to market that have attracted significant investor interest. This is particularly relevant for retail companies with a defined online growth strategy and we expect to see more retail stories listing before summer.” 

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