
Exits: Private equity IPO prices fall
With a number of high-profile exits so far this year, selling companies has been a hot topic, particularly after the many difficulties of 2009. However, the IPO market has been difficult for private equity players, and new figures show just how tough some listings have been.
Figures from unquote" Research's latest IPO Tracker show a number of this year's listings have seen share prices tumble on public markets. Furthermore, there is little correlation between specific markets and the success of an IPO, with markets across Europe seeing both winners and losers. However, UK markets have performed particularly badly.
The worst performing private equity-backed IPOs took place in the UK, and have seen their share prices fall by up to almost 40% since listing. Cambria Automobiles Holdings floated on London's AIM in April this year for £50m, with a 50p per share list price. However, today that share price has fallen to just 41p, an 18% fall. Promethian Technologies Group, which also listed on AIM this year, has seen its share price fall 39.6% since March 2010.
Even the top end of London's public markets have been troublesome for private equity-backed companies. The high profile flotation of delivery firm Ocado, which initially aimed to list for over £1bn but was forced to reduce the valuation amid low appetite from institutional investors, has also suffered. Ocado listed at 170p last month, having originally set a 200-275p price range (later reduced to 180-200p). The disappointing listing has been followed by further price falls, with shares now trading almost 18% below their listing price at 139.9p.
Of course, the UK is not the only market to see falling share prices. Netherlands-based Phillips Semiconductors has seen its share price fall 23%. Furthermore, Sweden's ScandBook AB was the worst performer, seeing its share price tumble almost 64% since listing in March.
It would seem institutional investors are not yet ready to put significant money into publicly listed equities. Many bought into major IPOs prior to the financial crisis, and will still be feeling the pain caused by the rapid fall in stock markets seen in late 2008 and early 2009. With economists again predicting a "double-dip" recession, greater certainty in the economic recovery will be needed to convince public market investors.
Latest News
Stonehage Fleming raises USD 130m for largest fund to date, eyes 2024 programme
Multi-family office has seen strong appetite, with investor base growing since 2016 to more than 90 family offices, Meiping Yap told Unquote
Permira to take Ergomed private for GBP 703m
Sponsor deploys Permira VIII to ride new wave of take-privates; Blackstone commits GBP 200m in financing for UK-based CRO
Partners Group to release IMs for Civica sale in mid-September
Sponsor acquired the public software group in July 2017 via the same-year vintage Partners Group Global Value 2017
Change of mind: Sponsors take to de-listing their own assets
EQT and Cinven seen as bellweather for funds to reassess options for listed assets trading underwater