United Internet AG’s web-hosting unit Ionos Group and motor parts maker Euro Group are set to be the first major companies to try to open up Europe’s market for initial public offerings after months of quiet.
(Bloomberg) — United Internet AG’s web-hosting unit Ionos Group and motor parts maker Euro Group are set to be the first major companies to try to open up Europe’s market for initial public offerings after months of quiet.
Ionos is considering kicking off its Frankfurt share sale as soon as next week, while Euro Group aims to launch its Milan IPO in February, people with knowledge of the matter said. The companies have held early meetings with fund managers to gauge demand, according to the people, who asked not to be identified because the information is private.
Warburg Pincus-backed Ionos could garner a potential market value of as much as €5 billion ($5.3 billion) based on early feedback, Bloomberg News reported last month. Euro Group, which makes stators and rotors used in electric motors, is considering raising around €500 million from its share sale and may seek a valuation of about €1.5 billion, the people said.
Shares in United Internet rose as much as 5.2% in early morning trading on Friday. The stock was down 0.7% at 2:03 p.m. in Frankfurt, giving the company a market value of €4.1 billion.
Deliberations are ongoing, and the timing and size of the potential offerings could change. Representatives for United Internet and Euro Group declined to comment.
The global IPO market crawled to a virtual standstill last year as investors turned risk-averse amid rising interest rates and heightened inflation. The latest issuers are betting on pent-up demand among investors and a stabilized economic outlook to buoy demand for fresh offerings.
Read more: After This Year’s IPO Slump, Bankers Are Wary of 2023 Relief
IPO proceeds tumbled by more than two-thirds in 2022, leading to sharp declines in fees across Wall Street and causing headcount reductions. After a tumultuous year, bankers are now cautiously expecting a recovery in the months ahead, fueled in part by a full pipeline of large listing candidates and signs of a stock market rebound.
Lottomatica, the Italian gambling company backed by Apollo Global Management Inc., is considering a Milan initial public offering as soon as the second quarter that could raise about $1 billion, Bloomberg News reported this week.
Among other deals brewing for this year is specialist German glazing company Schott AG’s planned IPO of its pharmaceutical unit. The company has brought on more banks as it moves forward with preparations for a listing of the $4 billion business as soon as this summer, people with knowledge of the matter said.
Schott’s IPO of the unit, which makes test tubes and glass packaging for drugmakers, is being led by Bank of America Corp., BNP Paribas SA and Deutsche Bank AG, the people said. It picked Citigroup Inc., Credit Suisse Group AG and Jefferies Financial Group Inc. as joint bookrunners, while Commerzbank AG and LBBW have been selected as co-lead managers, according to the people.
Spokespeople for the banks declined to comment. A representative for Schott said it’s recently carved out the business unit into a standalone company called Schott Pharma AG to take advantage of the dynamic developments in the drug market.
“By taking this step, we are enabling greater flexibility and focus for this business,” the spokesperson said. “At the same time, this move allows us to explore new financing options, including a possible IPO.”
Weak Market
Not everyone is ready to brave the still-turbulent markets. Moneyfarm, which is among Europe’s largest robo-advisers, has pushed back plans for a London IPO and is now considering a listing in early 2024, people with knowledge of the matter said.
The fintech company, which was initially targeting to sell shares this year, may be valued at about £500 million ($612 million) in an IPO, according to the people. It’s working with advisers including STJ Advisors Group Ltd., Barclays Plc and UniCredit SpA, they said.
Moneyfarm’s backers include M&G Plc, German insurer Allianz SE and venture capital firm United Ventures. No final decisions have been made, and the company could change its timeline depending on market sentiment. Representatives for Barclays and UniCredit declined to comment, while STJ didn’t immediately respond to queries.
Moneyfarm Chief Executive Officer Giovanni Daprà said it’s normal for growth companies to “carefully consider” the full range of possibilities for raising capital. However, “for the time being, it is totally untimely to talk about an IPO as we are focusing on developing the business further and our recent acquisition,” he said.
Still, bankers say there’s a pipeline of deals building up for the coming months, including dozens of issuers that were forced to postpone listing plans last year due to heightened volatility and subdued investor demand for new stocks.
Other IPOs that have gotten pushed back include Thyssenkrupp AG’s electrolysis plant business Nucera, Olam International Ltd.’s food ingredients arm and EQT AB’s skincare company Galderma. These offerings were originally expected to create listed companies with a combined value of roughly $40 billion.
–With assistance from Jan-Henrik Förster, Eyk Henning and Aaron Kirchfeld.
(Updates with details of Schott Pharma, Moneyfarm IPO plans, other deals in pipeline from 9th paragraph)
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