Nordic IPO health check – how have 2014's listings fared?

Mikkel Stern-Peltz
13 January 2016

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The Nordic stock exchanges have been a favoured exit route for private equity in 2015, but do IPOs return value to GPs as well as the new shareholders? Mikkel Stern-Peltz tracks the performance of 2014тs PE-backed IPOs

Private-equity-backed IPOs on the Nordic exchanges have enjoyed a busy two years, with seven listings taking place in 2014, and 10 in 2015.

Prospectuses often extol at length the benefits of public market ownership for companies, such as broadening shareholder bases and allowing all investors to get on board in the hopes the company will continue to perform as well as under its private equity owners.

Though past performance is no guarantee of future success, looking back at how 2014's listings have fared may give some indication of why private-equity-backed assets garner plenty of interest on the public markets.

Of seven companies listed in 2014, five have seen their share prices rise.

Company: RenoNorden
Listed: Oslo Stock Exchange, December
Share price at listing: NOK 47
Share price on 12/01/16: NOK 39.00
Vendor: Accent Equity Partners, CapVest Equity Partners

Despite substantial interest from investors and a fully exercised overallotment option, Accent and CapVest's Norwegian waste management firm RenoNorden has been underperforming since it floated.

Valued at NOK 1.28bn, shares in the business fell slightly on the first day of trading, and continues to trade at less than the introductory price a year later.

Company: Nexstim
Listed: Nasdaq First North Helsinki / Stockholm, November
Share price at listing: €6.20
Share price on 12/01/16: €6.25
Vendor: Capricorn Venture Partners, Finnish Industry Investments, HealthCap Private Equity, Life Sciences Partners, Lundbeckfond Ventures, Sitra

Jointly listed in Helsinki and Stockholm, medical equipment company Nexstim's share price has generally followed the overall market trend. It began falling in January last year as the effects of the oil price drop took hold, and began a stable recovery from May onward.

91% of the company's shares were allocated to retail investors in the IPO

Company: Thule Group
Listed: Nasdaq OMX Stockholm, November
Share price at listing: SEK 70
Share price on 12/01/16: SEK 109.75
Vendor: Nordic Capital

Nordic Capital's car-mounted sports-equipment carrier business Thule brought in SEK 2.1bn for the GP on a SEK 7bn valuation at IPO. Introduced at SEK 70 per share, Nordic Capital made a further SEK 2bn in June 2015, selling 20 million shares at SEK 98 apiece. In November last year, Nordic Capital sold a further 15% of the company for SEK 1.575bn.

The GP still retains a 29.3% stake in the business, which now trades around SEK 110, with a SEK 11bn market cap.

Company: XXL Sport & Villmark
Listed: Oslo Stock Exchange, October
Share price at listing: NOK 58
Share price on 12/01/16: NOK 95.25
Vendor: EQT

Norwegian sporting goods retailer XXL Sport & Villmark was listed by EQT at a NOK 8bn valuation, pricing its shares at the upper end of the pre-IPO range at NOK 58 apiece.

The GP was fully exited by September 2015, having first sold a 15% stake at NOK 80 per share, followed by its remaining 14% at NOK 83 per share. XXL's stock has continued to rise following EQT's exit, trading around NOK 100 per share, despite being on an stock exchange that has seen a turbulent year as a result of the ongoing oil price depression.

Company: Inwido
Listed: Nasdaq OMX Stockholm, September
Share price at listing: SEK 68
Share price on 12/01/16: SEK 97.50
Vendor: Ratos

Swedish door and window maker Inwido joined its owner Ratos as a listed entity on the Stockholm bourse in September 2014, landing the GP a 3.3x return 10 years after it first backed the company.

Ratos reaped a further SEK 730m on two share sales over the following 13 months, fully exiting Inwido in October 2015. Valued at SEK 3.94bn in its IPO, Inwido now trades at around SEK 100 a share, with a market cap of SEK 6bn.

Company: Scandi Standard
Listed: Nasdaq OMX Stockholm
Share price at listing: SEK 40
Share price on 8/12/15: SEK 55
Vendor: CapVest Equity Partners

CapVest's Nordic poultry and poultry products producer Scandi Standard listed at a SEK 2.4bn valuation in the culmination of a consolidation play in the Scandinavian poultry industry.

Created by Capvest and Lantmännen through the acquisition of Kronfågel, SweHatch and Skånefågel in Sweden, Danpo in Denmark and Cardinal Foods in Norway, the group's share price is up by more than 25% since listing.

Company: OW Bunker
Listed: Nasdaq OMX Copenhagen, March
Share price at listing: DKK 145
Share price on 12/01/16: DKK 0
Vendor: Altor

Altor-owned bunker fuel trader OW Bunker was a stock market darling when it listed at a DKK 5.3bn valuation in March 2014, reaping a tidy DKK 3.5bn for the GP.

Having performed well, OW was hit by a broadside just seven months later when fraud and a failed risk management strategy caused a $300m loss for the company, forcing it into bankruptcy.

Lawyers are still sifting through the wreckage of what was once Denmark's largest company by revenue, but became what several analysts and commentators have deemed the biggest financial scandal in the country for nearly a quarter of a century.

Nordic leavers
In addition to the seven companies above, two Nordic businesses were listed on non-Nordic exchanges: Danish customer service and software support company Zendesk listed on Nasdaq in New York, as did Copenhagen-headquartered pharmaceuticals company Forward Pharma.

Zendesk was valued at $632m at $9 per share in its IPO, and rose nearly 50% on its first day of trading. While the now San Francisco-based software company's share price more than doubled to around $24 apiece, Forward Pharma's performance has been much more lukewarm.

Listed at $21 per share in October last year, the Danish pharma company's stock chart does not tell a good story for investors. In what was the biggest biotech listing on the Nasdaq at the time, Forward Pharma dropped 17% on its first day of trading and performed modestly in its first months as a listed company. Though the stock rose to around $42 per share by July, it has slumped to around $17 since the start of 2016.