IPO Watch Europe Q2 2015 www.pwc.co.uk/deals €14.7bn IPO proceeds raised in Q2 2015 (excl. greenshoe) €31.1bn in H1 2015 and €33.7bn in H1 2014 121 IPOs Listed in Q2 2015 203 IPOs in H1 2015 and 214 IPOs in H1 2014 €192m Average offering value for Q2 2015 €230m for H1 2015 and €223m for H1 2014
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IPO Watch Europe Q2 2015
www.pwc.co.uk/deals
€14.7bnIPO proceeds raised in Q2 2015 (excl.
greenshoe)
€31.1bn in H1 2015 and €33.7bn in
H1 2014
121 IPOsListed in Q2 2015
203 IPOs in H1 2015 and 214 IPOs in
H1 2014
€192mAverage offering value for Q2 2015
€230m for H1 2015 and €223m for
H1 2014
2IPO Watch Europe Survey Q2 2015 |
European IPO trends 3
Market volatility and performance 5
Pricing and performance of top 5 European IPOs 6
Top 10 IPOs in Europe 7
Exchange activity by value 8
Exchange activity by volume 9
IPOs by sector 10
UK focus
Overview 11
Relative performance of London IPOs 12
Private equity and industry trends 13
US and Hong Kong domestic activity 14
Appendix – IPOs by market 15
Contacts / About IPO Watch Europe 16
ContentsOutlook for second half 2015:
• Following the Greek No vote, global markets have showed increasing signs of tension albeit without wide-spread panic. We believe July will be key in assessing the extent of the contagion risk and receptiveness of Europe’s markets to the pipeline of IPO candidates.
• Barring these factors, the trends observed in the first part of 2015 will continue and we expect continued IPO activity in the second part of the year:
- PE driven activity will continue, though at a slower pace as IPO exits compete with trade sales
- A number of spin-offs from large listed companies have already been announced, especially in the financial sector
- Privatisation programmes will also contribute sizable IPOs throughout Europe, including Italy, Netherlands and Poland
• There are other headwinds likely to impact Europe’s markets with volatility likely to be a recurring feature of the coming months, due to the uncertainty on US interest rates and the renewed concerns over the Chinese economy.
3IPO Watch Europe Survey Q2 2015 |
European IPO trends€14.7bn raised in Q2 2015, down 34% on Q2 2014 following the surge in activity across Europe last year
Figure 1: Quarterly European IPO activity by value and volume
Total money raised (€m) 35,887 17,986 15.423 33,409
Average offering value (€m)* 223 276 192 230
* Average offering value has been calculated based on total offering value including greenshoe excluding listings raising less than $5m
“We enter a period of uncertainty following the Greek referendum and wider concerns in the US and China may give rise to market turbulence and volatility. In this environment, a number of IPO plans may be derailed or postponed and in the short term we expect the summer holiday months to be relatively quiet. The pipeline for the second half of the year looks solid and we expect IPO activity to pick up towards the end of the third quarter.”
Mark Hughes
Partner in the UK Capital Markets Group
4IPO Watch Europe Survey Q2 2015 |
European IPO trendsStrong activity levels in both quarters resulted in a good H1 2015, slightly below H1 2014 but far ahead of the five previous years
Figure 2: European IPO activity (H1 and full year) since 2007*
Figure 3: Quarterly European IPO activity since 2012
*Excludes greenshoe. Note: Excludes IPOs on Borsa Istanbul, Zagreb Stock Exchange and Bucharest Stock exchange pre 2011
80.5
14.0
7.1
26.3 27.1
11.3
26.5
49.5
31.1
819
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126
380
459
288 279
375
203
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Os (€b
n)
H1 value €bn FY value €bn IPOs
2012 2013 2014 2015
5IPO Watch Europe Survey Q2 2015 |
Market volatility and performanceVolatility index has increased significantly towards the end of the quarter reflecting increasing uncertainty over Greece
Figure 4: Volatility compared to IPO proceeds
Figure 5: Historical performance of major market indices since January 2014
Turmoil in emerging
marketsMo
ne
y r
ais
ed
€b
n
VS
TO
XX
in
de
x
Money raised €bn VSTOXX index
-10%
0%
10%
20%
30%
40%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
% c
ha
ng
e s
inc
e 1
Jan
2014
DAX 30
CAC 40
FTSE 100
Source: Thomson Reuters as at 30 June 2015
IPO of ISS,
Pets at Home
and Poundland
IPO of AA,
B&M and
Euronext
2014 2015
IPO of NN,
FinecoBank
and SSP
Declining oil price
2014 2015
QE by
ECB
IPO of Sunrise,
Aena, Elis and
GrandVision
Greece
uncer-
tainty
0
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Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun0
5
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6IPO Watch Europe Survey Q2 2015 |
Pricing and performance of top 5 European IPOsThe top 5 IPOs have all outperformed their respective indices
Figure 6: Top five IPOs in Q2 2015
Figure 7: Offer price versus initial price range of top five IPOs
Cellnex
Telecom
Woodford
Patient Capital
Trust
Spie Europcar INWIT
Exchange BME London Euronext Paris Euronext Paris Borsa Italiana
Tele Columbus 477 510 Technology Deutsche Börse Germany No
OVS 414 446 Consumer Goods Borsa Italiana Italy Yes
Saeta Yield 435 442 Utilities BME Spain No
Wizz Air Holdings 364 419 Consumer Services London Hungary Yes
Total 11,702 12,989
Top 10 IPOs in EuropeSpain hosted the largest IPO in both quarters so far in 2015
Figure 13: Top ten IPOs
Other
Top 10 IPOs
45%
55%
Figure 12: Top ten IPOs (value) in Q2 2015 “The weather is warm and the window is certainly open in Madrid. A strong start to the year with the Aena IPO has been quickly followed up in Q2, with Cellnex and Patentes Talgo standing out in terms of capital raised, with Euskatel successfully completing its IPO on 1 July. Entering the traditionally quieter summer period, we reflect upon what has been a fantastic year to date for the Spanish IPO market, far surpassing 2014 total proceeds already. With the improving economic indicators, we are hopeful of more positive news to follow for 2015, but also note the elections in November are likely to result in a slower end to the year.”
Figure 10: Top five stock exchanges in Europe in Q2 2015
Figure 9: IPO offering value by stock exchange*
*Excludes greenshoe
**Excludes listings raising less than $5m
BME
5 IPOs raised *
€2.6bn
Average IPO proceeds **
€712m
Largest IPO:
Cellnex Telecom€1,946m
(€2,141m incl. greenshoe)
OMX
37 IPOs raised *
€2.4bn
Average IPO proceeds **
€121m
Largest IPO:
Pandox€601m
(€691m incl. greenshoe)
Euronext13 IPO raised *
€2.3bn
Average IPO proceeds **
€239m
Spie€939m
(€1,033m incl. greenshoe)
Borsa Italiana
7 IPOs raised *
€1.0bn
Average IPO proceeds **
€165m
Largest IPO:
INWIT€796m
(no greenshoe exercised)
Exchange activity by valueLondon retained its leading position in H1 2015, however proceeds in Spain almost doubled compared to H1 2014
LSE
28 IPOs raised *
€4.7bn
Average IPO proceeds **
€200m
Largest IPO:
Woodford Patient Capital Trust
€1,108m
(no greenshoe exercised)
9IPO Watch Europe Survey Q2 2015 |
Exchange activity by volume OMX saw more activity in Q2 2015 than the whole of H1 2014, representing over a quarter of all European Q2 IPOs by volume
“After a few quiet years, a positive trend of IPOs on the Italian Stock Exchange began in mid 2014 and has continued through the first half of 2015. The ECB liquidity injection has improved the performance of the Italian equity markets, reducing volatility and improving conditions for companies entering the capital markets for the first time. There is a robust pipeline of Italian corporate and public service entities seeking out an IPO, most of which are monitoring the developments in Greece in order to plan the right time to approach the markets.“
IPOs by sectorFinancials and Consumer services declined significantly compared to H1 2014, partially offset by growth in Telecom, Industrials and Consumer goods
*Excludes greenshoe**Excludes listings raising less than $5m
Stock exchange offering value (€m) H1 2014 Q1 2015 Q2 2015 H1 2015 variance vs.
“The second quarter has been good for French IPOs, especially PE-backed ones. All transactions raising more $50m were PE backed over the period, reflecting the renewed confidence in economic conditions in France. Investors are also keen to support innovation with healthcare being the most dynamic industry by number of IPOs. The pipeline remains good, although the uncertainty related to European and international geopolitics might hinder the potential level of activity in the coming months.”
Philippe Kubisa
Partner in the French Capital Markets Group
11IPO Watch Europe Survey Q2 2015 |
UK focus – OverviewA decrease in average deal size combined with an uptick in trade sales led to lower activity in London compared to the buoyant activity in Q2 2014
Figure 15: London IPO trends – value* Figure 16: London IPO trends - volume
Proceeds (incl. greenshoe)
€m £m Sector Market Country PE backed
Woodford Patient Capital
Trust1,108 800 Financials Main United Kingdom No
Sophos Group 495 352 Technology Main United Kingdom Yes
Cairn Homes 440 325 Consumer Goods Main Ireland No
Toro 330 245 Financials Main United Kingdom No
Apax Global Alpha 297 218 Financials Main United Kingdom Yes
“After leading the PE-backed trend for the last two years, US PE driven IPOs started to slow down six months ago and we are seeing a similar trend emerge in the UK. In stark contrast, PE exits across continental Europe remain active - whether this continues into the second half of the year remains to be seen due to the continued uncertainty over Greece.”Viv MaclachlanDirector in the UK Capital Markets Group
12IPO Watch Europe Survey Q2 2015 |
UK focus - Relative performance of London IPOs
Figure 18: Share price performance of London IPOs relative to the FTSE all share index, from IPO to 30 Jun 2015
Note: Threshold of $5m proceeds | Relative performance based on the FTSE All Share Index for Main Market and SFM listed companies and FTSE AIM All Share index for AIM listed companiesSource: Dealogic and Thomson Reuters as of 30 June 2015
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-14
-33
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-67
-80% -60% -40% -20% 0% 20% 40% 60% 80%
Aldermore Group
Stride Gaming
Drum Income Plus REIT
Wizz Air
Integrated Diagnostics
Sanne Group
Auto Trader
Shawbrook Group
Eurocell
RedX Pharma
Woodford Patient Capital Trust
Curtis Banks
Marshall Motor Holdings
John Laing Group
Lakehouse
Miton UK MicroCap Trust
Cairn Homes
Elegant Hotels Group
DFS Furniture
Grand Group Investment
Ranger Direct Lending Fund
Sequoia Economic Infrastructure Income Fund
PureTech Health
Amedeo Air Four Plus
Apax Global Alpha
AEW UK REIT
Gateley Holdings
Verseon
Sophos Group
Toro
Non-Standard Finance
Gabelli Value Plus+ Trust
VPC Speciality Lending Investments
Revolution Bars Group
PTSG
Zegona Communications
MayAir Group
Gear4music
Adgorithms
Puma VCT 11
ScS Group
HSS Hire Group
Aquatic Foods Group
IronRidge Resources
5companies have underperformed
the index
39companies have outperformed
the index
Main Market
AIM and SFM
13IPO Watch Europe Survey Q2 2015 |
UK focus - Private equity and industry trends
* UK IPOs raising over $50m, excludes closed-end funds, SPACs, SPVs, Capital Pool companies, Investment Managers, REITs, Royalty Trusts** Excludes greenshoe
Figure 19: PE-backed vs non PE-backed IPO trends in London*
Figure 20: Five largest UK PE-backed IPOs of Q2 2015
Sophos Group 495 352 Technology London United Kingdom
Shawbrook Group 342 250 Financials London United Kingdom
Integrated Diagnostics 299 216 Health Care London Egypt
Apax Global Alpha 297 218 Financials London United Kingdom
Elegant Hotels Group 87 63 Industrials London Barbados
- - -
-
82%100% 56%
49%51%
74%
70%54%
96%
57%
“We are now almost two years into the resurgence of PE-driven IPO activity and the backlog of IPO candidates is now naturally slowing. For some time we have seen a large number of these transactions being run as dual track processes and, as we see private and public valuations converge, trade sales become quite attractive, as essentially they provide a one-time exit to existing shareholders.”
James Fillingham
Deals Partner
14IPO Watch Europe Survey Q2 2015 |
US and Hong Kong domestic activityThe US IPO market was reinvigorated in the second quarter after a slow start to 2015 Hong Kong more than doubled H1 2015 proceeds compared to last year
* Excludes greenshoe
H1 2014 Q1 2015 Q2 2015 H1 2015
Stock exchange IPOs
Offering
value (€m)* IPOs
Offering
value (€m)* IPOs
Offering
value (€m)* IPOs
Offering
value (€m)*
Europe 214 33,730 82 16,375 121 14,724 203 31,099
US 160 23,648 41 5,411 75 11,757 116 17,168
Hong Kong 52 7,630 28 2,075 46 15,099 74 17,174
• The US IPO market came back to life in the second quarter of 2015, increasing 83 percent in volume and 111 percent in proceeds raised, compared to the first quarter of 2015 which had been a record low. 75 IPOs completed in Q2 2015 raising €11.8bn, a significant increase over the first quarter’s 41 IPOs and €5.4bn in proceeds, despite slowing economic growth forecasts in the US and the uncertain interest rate environment.
• The healthcare industry continued to lead IPO market activity with 31 IPOs (41 % of total volume) - the high demand for these smaller biotechnology and biopharmaceutical IPOs showcases the interest among IPO investors for high-growth companies. On a total proceeds basis, Q2 was generally well-diversified, with the energy sector raising the highest proceeds – as energy prices slowly show signs of recovery.
• Companies continue to crystalize valuations through spin-off transactions to help create improved corporate clarity and visibility. There were 9 spin-offs that closed in the second quarter of 2015. This brought the total number of completed spin-offs for the year to 14, which already exceeds the total spin-offs in 2012 and is on track to surpass the 18 spin-offs in 2013.
• In Hong Kong, the second quarter took off after a slow start of the year with 46 IPOs raising €15.1bn, compared to €2.1bn in Q1 2015. Overall, the half year results more than doubled compared to last year, with €17.2bn raised in H1 2015 against €7.6bn in H1 2014.
• The new Shenzhen-Hong Kong Stock Connect program, along with the existing Shanghai-Hong Kong Stock Connect program have fuelled the positive IPO trend and define new growth opportunities and perspectives for companies and investors, reflected in the strong results of this first half-year.
PricewaterhouseCoopers LLP which is a member firm of PricewaterhouseCoopers International Limited,
each member firm of which is a separate legal entity.
Contacts
IPO Watch Europe surveys all new primary market equity IPOs on Europe’s principal stock markets and market segments (including exchanges in Austria, Belgium, Croatia, Denmark, France, Germany, Greece, the Netherlands, Ireland, Italy, Luxembourg, Norway, Poland, Portugal, Romania, Spain, Sweden, Switzerland, Turkey and the UK) on a quarterly basis. Movements between markets on the same exchange are excluded.
This survey was conducted between 1 April and 30 June 2015 and captures IPOs based on their first trading date. All market data is sourced from the stock markets themselves and has not been independently verified by PricewaterhouseCoopers LLP.