Corporates best placed for autumn IPO window as sponsors sit out

Private equity investors, on the other hand, will be inclined to keep a more cautious approach, continuing with a trend of ditching listings in favour of sale exits or extending holding period, as reported by Mergermarket's ECM Pulse.

"There are going to be IPOs in September, but I think most are going to come from corporate sellers," said an ECM banker. "Private equity sellers can sit out in a bad market, but corporates have a strategy to execute on and therefore are more willing to move ahead even if it means a lower valuation."

Private-equity backed IPOs, while almost non-existent this year, have been on the decline since peaking in the first quarter of 2021, the height of Europe's most recent IPO bull market. Poor trading in large transactions, such as Bridgepoint Group-backed Deliveroo, caused backlash against an overheated IPO market.

Valuations came under pressure and sponsor-backed IPOs dropped off considerably in H2 2021 with large corporate deals such as the USD 2.7bn listing of Volvo Cars in Stockholm and a USD 1.8bn IPO of Spanish renewable energy company Acciona Energia, driving the market.

Non-sponsored IPOs have continued in EMEA in 2022, although most of the issuance has been driven by listings in Middle East. But deals in the region have similar characteristics to many corporate IPOs in that they are strategic and with less price sensitive sellers, focused on aftermarket performance.

Price takers
Italian water technology and hydrogen company Industrie De Nora, the largest European IPO to price in the pre-summer window, had to discount its valuation to raise strategic growth capital for acquisitions, its CEO told this news service this week. The deal was driven by the De Nora family alongside minority corporate shareholder SNAM.

Sellers attempting a 2022 deal will have to be "price takers", just like De Nora. The theme extends to private markets, after Swedish fintech (and once IPO hopeful) Klarna completed a fundraising at a meagre USD 6.5bn valuation, a staggering 86% drop from its implied USD 45.6bn price tag in June 2021.

Italian energy conglomerate ENI was the latest high-profile company to postpone a listing. It delayed the IPO of retail gas and renewables division Plenitude when Russia's decision to cut gas supplies to Europe put pressure on valuation during bookbuilding, this news service reported. But several sources close to the deal now say it is likely to be back before the end of the year.

ENI could be joined in the H2 IPO market by German Thyssenkrupp, potentially seeking a listing for its hydrogen business Nucera this year, and Swiss ABB with the potential sale of its e-mobility unit.

And, of course, there are still hopes of a European IPO blockbuster, as VW aims to float Porsche this year. A source close to the transaction said he is still hopeful of a listing in 2022 despite volatile equity markets.

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