21 consumer and retail businesses floated in the UK in the first six months of 2014, ranging from the tiny – including Safestay, a single-venue boutique hostelry, and rare books dealer Scholium Group – to some of the best-known retailers on the high street, including Pets at Home, Poundland and B&M Bargains. But it wasn’t all good; several businesses that had previously intended to list instead opted for alternative sales processes or abandoned their plans altogether. House of Fraser, A.S. Watson, Blue Inc, MandM Direct and Travelex, for example, all underwent private sales, while others have delayed or cancelled IPO plans.
MBS’s work and research into the private equity space has seen an amazing period for IPOs so far this year. So, we are waiting with excitement to see which companies are going to float in the autumn, and how the markets will react. According to the rumours, there are an extremely interesting blend of businesses which are setting up for IPOs, ranging from Alibaba and luxury shoemaker Jimmy Choo to motoring body RAC and FMCG giant United Biscuits.
Europe has seen great performances from various companies undergoing floats in 2014; there have been 176 European IPOs so far this year, which is a hugely encouraging figure. However, several of the biggest headlines could well be made in the US. Alibaba is set to get its public launch in the next week or so, and there are even rumours of a potential US IPO from Swedish music streaming giant Spotify. There have been a great deal of tech and media acquisitions over recent months, and as the Wall Street Journal states, offerings are attracting higher prices than in previous years. However, the IPO still represents a great chance for companies looking to create value for their investors.
What is fascinating to me is how the pace of the IPO market comes around in fits and starts, with long dry spells followed by periods where companies never seem to stop going public. Indeed, the total amount raised over the second quarter of 2014 – a bumper three months – was four times as much as the same period a year ago. The consumer sector was one of the most active during this period, too. With the performance of consumer-facing businesses being so closely related to people’s ability to spend and enjoy services, it indicates that the average consumer is in a better place now than a year ago.
Over this summer MBS have been analysing IPOs, looking at the way businesses can best prepare for the process and observing the impact a float has on companies. As part of our research we interviewed a mixture of CEOs, CFOs, chairmen and non-executives from most of the consumer-facing businesses that have floated so far in 2014, as well as investors, PE backers and other advisers. We have produced a private equity white paper detailing the state of the IPO market this year, canvassing opinions from industry investors, CEOs and chairmen.
You can download a copy of the white paper below! Which companies do you think are set up for amazing IPOs this September?