ipo watch europe - q4 2019 - pwc · 2020-01-20 · this ipo has been a notable success in the...

Contents

2019 IPO review and outlook for 2020 1

UK focus 3

Overview 4

Case study: Network International Holdings plc 5

YTD relative performance of UK IPOs 6

European focus 7

2019 European IPO trends 8

Market volatility 10

Top ten IPOs in Europe 11

Pricing of top five IPOs 11

The sector story 12

European PE trends 13

Global focus 14

Global money raised via IPOs 15

Leading transactions 2019 16

Overview of global IPO activity 17

Global perspective: Cross-border IPOs 18

Appendix 19

IPOs by market 20

2019 IPO review and outlook for 2020

IPO markets were quiet this year impacted by a combination of US trade relations and Brexit uncertainties, which resulted in understandably fewer transactions in the year.

European IPO marketsEuropean IPO proceeds reached €22.1bn in 2019, down by 40% compared to 2018 where €36.7bn was raised from 195 IPOs. In total, there were 106 IPOs across European exchanges in 2019, 47% down on the prior year.

The top five IPOs in Europe raised €8.7bn, approximately 39% of 2019’s proceeds. The largest of the year was Italian payment-service company Nexi SpA raising €2.1bn closely followed by TeamViewer AG, the German software company, raising €2.0bn.

Whilst activity was subdued across Europe, the London Stock Exchange retained its position as Europe’s most active market in 2019 and contributed 30% of total European IPO proceeds.

More specifically, London IPO proceeds were £5.9bn in 2019, down by 39% compared to 2018, where £9.6bn was raised from 68 IPOs. In total, there were 27 IPOs on the London Exchange in 2019, 60% down on the prior year.

London retained its position due to a strong second quarter, which saw 13 IPOs raising £3.9bn. However, activity was particularly subdued in the second half of the year due to the Brexit extension and market conditions.

Nasdaq Stockholm was in second place by proceeds raised with €3.7bn and Deutsche Börse third with €3.6bn. This was a significant increase for Nasdaq Stockholm over recent years, boosted by the IPO of EQT Partners AB, which raised €1.3bn. In contrast 2019 represented a marked decline

€22.1bn IPO proceeds in 2019, down40% from €36.7bn in 2018

106 IPOs in 2019 across Europe, down 47% from 200 IPOs in 2018

€209m average offering value in 2019, anincrease of 14% on €183m in 2018

IPO markets are sensitive to uncertainties and whilst there were windows of activity during the year the European IPO market has undoubtedly been impacted by US-China trade tensions and Brexit.

Looking back over the year at the London market there were several successful high profile Private Equity IPOs, somewhat against the prevailing dual track trend. Namely the IPOs of Network International, Watches of Switzerland and Trainline which demonstrated significant investor demand with positive aftermarket performance.

Critically we are now seeing progress in both US-China trade relations and the UK election result, which has given a clear steer to the markets concerning Brexit. This provides a positive backdrop to the IPO markets as we go into 2020.

Peter WhelanPartner, UK IPO Lead at PwC

“

in proceeds raised for the Deutsche Börse, compared to €11.3bn in 2018, which was an exceptional year due to the IPOs of Knorr-Bremse AG and Siemens Healthineers AG at €3.8bn and €4.2bn respectively. A notable point for the Deutsche Börse was that there were only four IPOs in the year.

TrendsGiven the low IPO volume in the year, it is more difficult to identify specific trends, but it was noticeable that against the trend in recent years to dual track exits, there were some significant private equity IPOs that showed strong interest and have performed well in the aftermarket, notably Network International, Watches of Switzerland and Trainline.

Further, despite the backdrop of Brexit, London has continued to attract cross-border IPOs, such as the Middle Eastern payments business Network International; Helios Towers, the African telecom tower infrastructure company; and Africa’s largest mobile operator, Airtel Africa.

Expectations for 2020The end of 2019 showed progress in two of the key areas that had been casting a shadow over the market in the form of both US-China trade relations and Brexit post the UK election result.

As we start 2020 there are concerns for the markets regarding the tensions between the USA and Iran. We shall see how the situation develops. However early indications for the IPO market hint at measured optimism.

PwC | IPO Watch Europe 2019 | 1

UK focus


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Figure 1: UK IPO trends (by offering value)

Figure 3: Top five UK IPOs in 2019

Figure 2: UK IPO trends (by volume)

UK focus: OverviewLondon remained in #1 position in Europe by values and volumes, but saw overall declines from 2018 of 39% and 60%

2016£5.7bn

201650

2017£14.4bn

201781

2018£9.6bn

201868

2019£5.9bn

201927

Issuer Value (£m) Sector Market Private Equity (PE) backed

Network International Holdings plc 1,218 Financials* Main

Trainline plc 1,093 Consumer Services Main

Airtel Africa plc 541 Telecommunications Main

Schiehallion Fund Ltd 363 Financials Main

Octopus Renewables Infrastructure Trust plc 350 Financials Main

While IPO activities were understandably subdued across Europe in 2019, the London market remained receptive to high quality issuances as shown by positive aftermarket performance.

Simon WilliamsDirector, UK Capital Markets Group at PwC

With a focus on value creation, the best deals are those distinguished by a simple story that is both compelling and easily communicated. But in an IPO, how does the work performed by the deal and operations teams get communicated to investors?

Telling the equity story needs careful planning as the information available to investors is much more backward looking. If you want investors to price in performance improvements, then there will need to be some evidence of this that you can clearly point to in the audited financial statements or IPO marketing material. Finally, but very importantly, your entire management team needs to be able to stand behind this story, ensuring the investors hear consistent messages from all parts of the business.

Chris TemplePartner, Value Creation in Deals at PwC

Main AIM Main AIM

2016 2017 20192018 2016 2017 20192018

*IPO Watch Europe has reclassified the sector for this IPO from Industrials to Financials

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4 | IPO Watch Europe 2019 | PwC

European focus


London Stock Exchange27 IPOs in 2019

€6.7bnLargest IPO:

Network International Holdings plc

€1.4bn

Nasdaq Stockholm17 IPOs in 2019

€3.7bnLargest IPO:

EQT Partners AB

€1.3bn

Deutsche Börse 4 IPOs in 2019

€3.6bn

Largest IPO:

TeamViewer AG

€2.0bn

Figure 8: Top three stock exchanges in Europe in 2019 (by offering value)

European IPO trendsNasdaq Stockholm was the only European exchange to see an increase in values in 2019, with €3.7bn compared to €1.3bn the previous year

1 2 3


Top ten IPOs in Europe2019 saw eight €1bn plus IPOs, the largest being Nexi SpA

Figure 11: Top ten IPOs in 2019

Trading date Issuer €m Sector Stock Exchange Country of operation PE backed

12 Apr Nexi SpA 2,056 Financials* Borsa Italiana Italy

24 Sep TeamViewer AG 1,969 Technology Deutsche Börse Germany

20 Nov Francaise Des Jeux SA-FDJ 1,826 Consumer Services Euronext Paris France

10 Apr Network International Holdings plc 1,414 Financials* London Stock Exchange United Arab Emirates

27 Jun Traton SE 1,387 Industrials Deutsche Börse Germany

12 Apr Stadler Rail AG 1,351 Industrials SIX Swiss Exchange Switzerland

24 Sep EQT Partners AB 1,262 Financials Nasdaq Stockholm Sweden

21 Jun Trainline plc 1,227 Consumer Services London Stock Exchange United Kingdom

3 Oct Verallia SA 963 Industrials Euronext Paris France

25 Oct SoftwareONE Holding AG 683 Technology SIX Swiss Exchange Switzerland

Total 14,138

Pricing of top five IPOsTwo of the top five IPOs in Europe priced towards the top end of the range

Figure 12: Top five European IPOs in 2019

Nexi SpA TeamViewer AG Francaise Des Jeux SA-FDJ

Network International Holdings plc

Traton SE

Exchange Borsa Italiana Deutsche Börse Euronext Paris London Stock Exchange Deutsche Börse

IPO date 12 Apr 24 Sep 20 Nov 10 Apr 27 Jun

Money raised (€m) 2,056 1,969 1,826 1,414 1,387

Price range €8.50 – €10.35 €23.50 – €27.50 €16.50 – €19.90 £3.95 – £4.65 €27.00 – €33.00

Offer price €9.00 €26.25 €19.90 £4.35 €27.00

The privatisation of FDJ was the most important placement in France since Natixis in 2006. This IPO has been a notable success in the public eye, with nearly half-a-million French people becoming shareholders of FDJ. Other than the IPOs of Verallia and FDJ, 2019 was a year of low activity on Euronext.

Philippe KubisaFrench Capital Markets & Accounting Advisory Services Leader at PwC

“

*IPO Watch Europe has reclassified the sector for this IPO from Industrials to Financials


Global focus


Leading transactions 2019The largest IPO in history took place in Q4 2019, as Saudi Aramco raised $25.6bn, valuing the Oil & Gas giant at $1.7trn.

Figure 21: Top ten global IPOs in 2019

Note: IPOs are classified as ‘In Range’ if the IPO is priced in the middle 50% of the price range. The top and bottom 25% are classified as ‘Top of Range’ and ‘Bottom of Range’.

Source: Dealogic, Bloomberg as of 31 December 2019

Extract from PwC Global IPO Watch, Q4 2019. For further details, refer to ‘About IPO Watch Europe’

Issuer name

Saudi Aramco

Uber Technologies

Budweiser Brewing Co APAC

Avantor Lyft Nexi XP TeamViewer Francaise Des Jeux

ESR Cayman

Pricing date

5 Dec 19 9 May 19 24 Sep 19 16 May 19 28 Mar 19 12 Apr 19 10 Dec 19 24 Sep 19 20 Nov 19 25 Oct 19

Issuer country

Sector Oil & Gas Consumer Services

Consumer Goods

Health Care Consumer Services

Industrials Financials Technology Consumer Services

Financials

Exchange Saudi SE NYSE HKEX NYSE NASDAQ Borsa Italiana

NASDAQ Deutsche Börse

Euronext Paris

HKEX

Filing range 30.00 – 32.00

44.00 – 50.00

27.00 – 30.00

18.00 – 21.00

62.00 – 68.00

8.50 – 10.35

22.00 – 25.00

23.50 – 27.50

16.50 – 19.90

16.20 – 17.40

Offer price 32 45 27 14 72 9 27 26.25 19.9 16.8

Pricing Top of range

Bottom of range

Bottom of range

Below range

Above range

In range Above range

In range Top of range

In range

Money raised

$25.6bn $8.1bn $5.7bn $3.3bn $2.6bn $2.3bn $2.3bn $2.2bn $2.0bn $1.8bn

Free float 1.5% 10.7% 12.8% 44.6% 12.4% 36.4% 15.1% 37.5% 48.4% 27.6%

Secondary shares

100.0% 0.0% 0.0% 0.0% 0.0% 65.2% 41.3% 100.0% 100.0% 62.7%

Performance

1-day 10.0% (7.6%) 4.4% 3.6% 8.7% (6.2%) 27.6% (3.6%) 14.1% 5.4%

1-month N/A (1.9%) 3.0% 34.3% (20.5%) (6.6%) N/A (12.2%) 18.2% (3.3%)

Current 9.7% (33.9%) (2.6%) 29.6% (40.3%) 37.6% 42.7% 21.5% 19.7% 4.8%


Overview of global activityEven with the largest IPO ever in Q4 2019, Saudi Aramco, IPO proceeds were at their lowest level for three years.

Figure 22: Global IPO activity in 2019

2017 2018 2019 Q4 2017 Q4 2018 Q4 2019

IPO activity

Number of IPOs 1,523 1,198 1,040 441 303 338

% sponsor-backed 9.5% 8.1% 6.6% 10.0% 4.3% 4.4%

Money raised $209.0bn $223.6bn $199.2bn $67.8bn $57.6bn $71.0bn

% sponsor-backed 23.0% 15.5% 18.2% 21.2% 7.5% 11.5%

Advanced metrics

Free float % 31.9% 32.4% 31.1% 31.3% 32.1% 30.3%

Overallotment exercised (%)1 25.4% 33.4% 32.2% 26.7% 33.2% 24.0%

% secondary shares 14.6% 13.6% 12.3% 17.5% 10.9% 11.8%

1 Overallotment exercised (%) presents the percentage of IPOs in which the overallotment option has been exercised (either fully or partially).

Source: Dealogic, Bloomberg as of 31 December 2019

Note: IPOs are classified as ‘In Range’ if the IPO is priced in the middle 50% of the price range. The top and bottom 25% are classified as ‘Top of Range’ and ‘Bottom of Range’.

Extract from PwC Global IPO Watch, Q4 2019. For further details, refer to ‘About IPO Watch Europe’

Outlook for 2020

• There are grounds for cautious optimism for IPOs in 2020, but the outlook depends on the evolution and interplay of a number of factors, across the different regions.

• The fiscal environment remains relatively benign, with low interest rates, the Brexit situation has become clearer, and there has been a more positive tone in the US-China trade negotiations. However, with the heightened tensions between the US and Iran, there has been a more recent flight to safety by investors, potentially diminishing the appetite for IPOs.

Contact

• As ever, strong candidates will find investors, notwithstanding the broader macro environment. IPO candidates with a differentiated and robust equity story, and attractive pricing will have the best chance of success. In turn this puts the spotlight on the fundamentals around the track record, prospects and/or path to profitability, and the quality of preparation to enable early engagement with investors.

Ross Hunter

PwC IPO Centre Leader

PwC United Kingdom

Nadja Picard

PwC Europe Capital Markets Leader

PwC Germany


Appendix


ContactsPeter Whelan

M: +44 (0)7770 977937 E: [email protected]

John Reilly


Simon Williams


About IPO Watch Europe

About IPO Watch Europe

IPO Watch Europe surveys all new primary market equity IPOs on Europe’s principal stock markets and market segments (including exchanges in Austria, Belgium, Bulgaria, Croatia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, the Netherlands, Norway, Poland, Portugal, Romania, Serbia, Spain, Sweden, Switzerland, Turkey and the UK) on a quarterly basis. Movements between markets on the same exchange are excluded.

The data in this report is based on data extracted from Dealogic and includes greenshoe (if exercised). Only transactions with a minimum of $5 million money raised have been included, The data excludes PIPOs and transactions on Over-The-Counter exchanges. In case IPOs take place on two or more exchanges, the full amount of money raised is attributed to all exchanges. Industry classification is based on the FTSE Russell Industry Classification Benchmark (ICB).

This survey was conducted between 1 January and 31 December 2019 and IPOs based on their pricing date. All market data is sourced from Dealogic and has not been independently verified by PricewaterhouseCoopers LLP.

Basis of preparation for Global IPO Watch

Global IPO Watch analyses IPO and FO trends on a quarterly basis, both at a global and regional level. It is based on data extracted from Dealogic, whereby only transactions with a minimum of $5 million money raised have been included. Transaction proceeds include the overallotment option (if exercised). The data excludes PIPOs and transactions on Over-The-Counter exchanges. In case IPOs or FOs take place on two or more exchanges, the full amount of money raised is attributed to all exchanges. If a transaction is executed in two or more regions, the money raised is also attributed to all regions. Industry classification is based on the FTSE Russell Industry Classification Benchmark. Index performance is based on pricing data extracted from Bloomberg.

Executing a successful IPO is typically the culmination of a complex process, whatever market you list on. From strategy, accounting, reporting, financial systems, governance, adviser selection, marketing process, media and investor relations, to treasure and financial risk management, legal, tax, HR, technology – every piece of the puzzle must be in place, and connected before you proceed.

Planning and good preparation are crucial to a successful IPO, regardless of the market or stock exchange. PwC’s dedicated team of capital markets professionals are here to help and make the task at hand an easier experience for you. We have deep experience and knowledge of the rules and regulations governing all major capital markets – and a successful history of working on both international and domestic IPOs.

Find out more at www.pwc.co.uk/capitalmarkets


This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

© 2020 PricewaterhouseCoopers LLP. All rights reserved. PwC refers to the UK member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details

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ipo watch europe - q4 2019 - pwc · 2020-01-20 · this ipo has been a notable success in the...

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