Europe's IPO Bankers Pin Hopes on Fall Window as Revival Falters

Mint

01-07-2025

(Bloomberg) -- After the slowest first half for European initial public offerings in more than a decade, dealmakers are banking on several large transactions to reignite the market later this year.
IPOs in the region have raised roughly $5.52 billion so far in 2025, a 60% decline from a year ago, according to data compiled by Bloomberg. Turmoil unleashed by President Donald Trump's tariffs froze the market for weeks, and while some firms have since launched offerings, others deferred or canceled debuts.
Europe's IPO recovery since has trailed Asia and North America. But with new and postponed deals penciled in for the second half, advisers hope European offerings can recover at a time when investor interest in the region has been rekindled by the prospect of increased defense spending and fiscal stimulus.
'There are a handful of European IPOs lined up for September or October that are true landmark events,' said Martin Thorneycroft, global co-head of equity capital markets at Morgan Stanley.
Private equity firm Hellman & Friedman is considering a listing of security company Verisure in Stockholm as soon as this year that could value the business at more than €20 billion ($23.5 billion) including debt, Bloomberg News has reported. German stock exchange operator Deutsche Boerse AG is mulling a potential $1 billion share sale for its unit ISS Stoxx GmbH as soon as the second half.
'The bigger tests for the European IPO market come post-Labor Day when we should see some jumbo transactions,' said Alex Watkins, co-head of international ECM at JPMorgan Chase & Co., referring to the early-September US holiday that traditionally marks the start of the fall window. He sees the market picking up globally in the second half, 'setting the stage for a stronger IPO year in 2026.'
Smaller and mid-cap companies have made up the bulk of issuance over the last six months. The region's biggest offering came from Asker Healthcare Group AB in Sweden, which raised about 10 billion Swedish kronor ($1.05 billion) and has soared since its debut. Others have had a bumpier start as listed companies, with Spain's travel technology firm HBX Group International Plc still trading below its offering price after its transaction raised €748 million ($880 million).
Some companies have shelved plans to debut, with German online car-parts retailer Autodoc SE postponing its Frankfurt IPO, though the offering drew enough demand to cover the deal. Glencore Plc-backed Cobalt Holdings Plc also decided not to move forward with a $230 million London float.
Still, others are forging on with plans to go public before the summer lull. German medical technology firm Brainlab SE is set to debut this week after a Frankfurt IPO that's expected to raise €320 million, while Blackstone Inc.-backed casino operator Cirsa Enterprises SA announced plans for a Spanish listing.
How these deals fare will be important for encouraging more issuers to come to market, according to Luca Erpici, co-head of ECM at Jefferies Financial Group Inc. for Europe, the Middle East and Africa. But, ultimately, the success of any IPO will hinge on its own merits more than market momentum.
'It really comes down to the quality of the business, valuation and offer size,' Erpici said, adding that adjusting the size of an IPO is one of the 'key levers' sellers are using to ensure deals go well.
For example, Blackstone Inc. injected fresh cash into Cirsa before the IPO was announced by raising payment-in-kind debt. Its offering is now set to raise about €453 million, with the bulk of the proceeds going toward lowering its debt.
While Europe has seen successful large IPOs in recent years, mid-sized companies have generally had a harder time going public. The rise of index-tracking funds has lured away some of the traditional buyers for IPOs, and the higher interest rates that followed the Covid-19 pandemic increased the pressure on private equity-backed companies that have taken on debt, reducing their appeal to investors.
New offerings also have to contend with trade and geopolitical uncertainty.
'Volatility is here to stay, or at least more so than we have been used to, so markets are learning to live with that, and, selectively, companies will continue to come to market,' said Lyle Schwartz, senior managing director and EMEA ECM lead at Evercore Inc.
Companies that postponed listing plans earlier in the year could test the market again in the coming months. German pharmaceutical firm Stada Arzneimittel AG had postponed its planned IPO in March and Nordic Capital's Noba Bank Group AB pushed back plans to launch an IPO into the second half of the year.
Others like SMG Swiss Marketplace Group AG, the operator of online real estate portal ImmoScout24, could also list as soon as this year, Bloomberg News has reported.
'Many IPOs have been deferred to after the summer, so September will be the real benchmark for the IPO market,' said Gareth McCartney, global co-head of ECM at UBS Group AG.
Still, there's a risk that deals slip into next year because of company developments and the potential for markets to shift.
'You can see five or six European IPOs coming after Labor Day, but I don't think we're going to see a massive wave,' said Andreas Bernstorff, head of ECM at BNP Paribas SA. 'It's also unsure whether all will end up coming this year because of issues like leverage, and a lot of clients are considering what to do.'
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