After a sustained period of market uncertainty and volatility, the initial public offerings (IPO) market is showing some signs of recovery after a number of high-profile deals completed in the first quarter of 2012.
PwC’s IPO Watch Q1 2012 report found that a total of 58 IPOs raised €2.3bn on the European stock markets during the quarter compared to €0.9bn in Q4 2011 and €3bn in Q1 2011. Average IPO offering value rose to €50m in the quarter compared to €17m in Q4 2011 and €39m in Q1 2011.
The five largest IPOs accounted for over 86% of total IPO values raised in the quarter and were spread across a variety of industries.
The debuts of Ziggo in Amsterdam, a private-equity backed Dutch cable operator, and DSKH in Zurich, a trade and marketing company, dominated the IPO markets in Europe raising a total of €1.5 billion and accounting for 65% of the total proceeds raised in the period. As a result of these two deals, NYSE Euronext and SIX Swiss Exchange led the European IPO markets raising €975m and €681m on each exchange respectively.
Although activity remains muted compared to historical levels, the prospects for future IPOs have been boosted by the encouraging trading of a number of recent issuers, and renewed market stability.
Petr Podlipný, capital markets expert, PwC Czech Republic said:
“A number of IPOs are pricing at the top end of their range and have generally performed well in the aftermarket, which can only be good news for those companies considering an IPO later in the year. The Ziggo IPO may pave the way for other private equity backed companies as market conditions continue to improve.”
The US IPO market experienced some upturn in the first quarter of 2012, with 44 IPOs raising €4.4bn in proceeds, representing a 33% increase in IPO volume compared to 33 listings in the first quarter of 2011. The US markets also experienced strong aftermarket investor interest in new issuers, creating positive returns for 80% of this quarter’s IPOs.
With the confidence returning to the US market and the green shoots seen in Europe in Q1 2012 the signs are positive for IPO prospects for the remainder of 2012 barring any further fallout from the Eurozone crisis seen in 2011.
Petr Podlipný, added:
“Our teams at PwC have seen the pipeline of IPOs remaining busy, although we expect most new applicants to wait until the second half of the year to make their play and take advantage of IPO windows. Perhaps more significantly, we are also seeing a number of companies who were forced to shelve their IPO plans last year making a comeback. This is evidence that the general market malaise is starting to lift.”
1. IPO Watch Europe surveys all new primary market equity IPOs on Europe’s principal stock markets and market segments (including exchanges in Austria, Belgium, Denmark, France, Germany, Greece, Holland, Ireland, Italy, Luxembourg, Norway, Poland, Portugal, Spain, Sweden, Switzerland and the UK) on a quarterly basis. Movements between markets on the same exchange and greenshoe offerings are excluded. This survey was conducted between 1 January and 31 March 2012 and captures new market IPOs based on their transaction date. All market data is sourced from the stock markets themselves and has not been independently verified by PricewaterhouseCoopers LLP.
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