Things are looking up for Europe’s initial public offerings market in 2018. As companies from Siemens to Deutsche Bank prepare to tap investor demand with billion-dollar-plus share sales, analysts expect another busy year in equity capital markets. Optimism over economic growth will likely allow political concerns to take a back seat, even as negotiations between the UK and the European Union over Britain’s secession from the bloc gather steam.
The region has had a strong showing in 2017 – companies and their shareholders have raised about $55bn in IPOs year-to-date, according to data compiled by Bloomberg, up from roughly $37bn in the same timeframe in 2016 and eclipsing peers in North America. Europe’s haul in a year peppered with major regional elections in addition to Brexit talks shows investors are willing to assess individual share sales undaunted by broader uncertainties, according to Ken Odeluga, an analyst at City Index in London.
“We expect 2018 IPO activity will surpass that of 2017 and will be more diverse in terms of geography, sectors, sponsor assets and corporate carve outs,” Achintya Mangla, head of EMEA equity capital markets at JPMorgan Chase & Co, said by e-mail. “A market environment that is very constructive is helping build a very strong pipeline.” Here are some of the biggest IPOs investors are expecting in 2018, considering listings on European exchanges:
Deutsche Bank Asset Management: Deutsche Bank expects to raise about €2bn from selling a quarter of its asset management business in an IPO, people familiar with the matter said last month. The partial offering would value the unit at about €8bn and account for substantially all the capital the bank had expected to raise through asset sales under a turnaround plan unveiled in March.
Siemens: Siemens will list its healthcare unit in Frankfurt in the first half of 2018 in what is set to be one of the biggest German IPOs in recent history. Frankfurt’s high liquidity and importance as a trading venue, particularly after the UK’s decision to leave the EU, were the reasons behind the decision to list there, the company said in November. The entire division could be valued at €30bn to €40bn, according to Bloomberg Intelligence, implying the listed shares would be worth between €4.5bn and €10bn.
Adyen: Silicon Valley-backed Dutch startup Adyen is considering an IPO as early as this year, people familiar with the matter said. No final decisions have been made and the company could choose to stay private for longer, the people said. Iconiq Capital, a multifamily wealth-management firm whose investors have included Facebook chief executive Officer Mark Zuckerberg and Twitter co-founder and CEO Jack Dorsey, invested in Adyen in 2015, valuing it at $2.3bn at the time.
Avast Software: Avast Software, the private equity-owned maker of antivirus software, has hired Rothschild as it explores an IPO, people familiar with the matter said. Part of Avast could be listed in a transaction of as much as $1bn, although no decision has yet been made, the people said. A sale could value the company at about $4bn, according to Reuters.
Belfius Bank: Belgium’s government has picked investment banks to advise on an IPO for Belfius that people familiar with the matter said could raise about €2.5bn ($3bn). Bank of America Corp, Citigroup, JPMorgan and UBS Group will work with local banks on the share sale. The listing is likely to value the lender at more than €8bn based on a multiple of about 0.9 times its book value and will probably take place this year, the people said.
B&S: B&S is considering an IPO that could value the Dutch consumer-goods wholesaler at about €2bn, people familiar with the matter said in September. ABN Amro Group, ING Group and Morgan Stanley have been selected to work on the sale, along with Deutsche Bank and Cooperatieve Rabobank, the people said. An IPO in Amsterdam could raise more than €500mn, they said.
Econet: African telecommunications group Econet is considering selling shares on the London Stock Exchange this year at a valuation of about $8bn after combining new and existing assets, people familiar said last month.
GEMS Education: Blackstone Group LP-backed private school operator GEMS Education plans to hire investment banks including Bank of America and Credit Suisse Group for an IPO in London this year, people familiar with the matter said this month. GEMS could fetch a valuation of about $4bn or more in a share sale, people familiar said in June.
Hunkemoeller: Carlyle Group, the owner of Dutch lingerie and swimwear brand Hunkemoeller, is working with advisers from Rothschild as it considers an IPO for the company in Amsterdam, people familiar with the situation said. An IPO is a possible alternative to a partial or full sale of the business, which has also been under consideration. A sale of Hunkemoeller could value the business at about 600mn euros, people familiar said in October.
Knorr-Bremse: German truck-brake maker Knorr-Bremse has picked JPMorgan and Deutsche Bank to lead a planned IPO, people familiar with the matter said. The share sale could value the company at as much as €15bn, according to the people, and is likely to happen this year in Frankfurt.
MRH GB: Lone Star Funds is considering an IPO of UK gas-station operator MRH GB that could value the business at about £1.5bn ($2bn), people familiar with the matter said. Sky News reported in November that Lone Star Funds has hired bankers at Citi, JPMorgan and Numis Securities to oversee the London IPO, and that the flotation is planned for this year, although the exact timing and a final decision about whether to go ahead have yet to be taken.
Sok Marketler Ticaret: Yildiz Holding, the owner of Godiva chocolates, is planning to sell shares in its Turkish discount grocery unit Sok Marketler Ticaret through a London IPO that may value the company at $3bn or more, people with knowledge of the plans said. Yildiz, which holds a controlling stake at the Istanbul-based retailer, is holding talks with international banks and may choose three or four to manage the sale, said the people.
The headquarters of Deutsche Bank in Frankfurt (file). As companies from Deutsche Bank to Siemens prepare to tap investor demand with billion-dollar-plus share sales, analysts expect another busy year in equity capital markets.
