Private equity IPO exits come alive in Europe- report

December 6
2:54 AM 2013

A report from the Financial News website said public share sales of businesses backed by private equity has made a comeback in Europe. The institutional investor demand for equities as well as a sluggish market for mergers and acquisitions has propelled private equity companies to make their exits through the public market.

Citing figures from data firm Dealogic, the report said there have been 22 financial sponsor-related public share sales done this year. This is equal to 48% of the IPO volume for Europe recorded to date. Private equity firm Doughty Hanson Principal Alex Moss told Financial News that the market is open now. He said that a near standoff occurred for two years when the market was not open since people were very far apart on valuation and that investors had a very low view of the valuation. It was not also the right valuation for owners of quality businesses to float the company, Moss said.

Moss added, "I think now people are much closer together. Clearly confidence has returned, the performance of the equity markets has been good and it was clear to us that there was a window at the start of this year."

Industry insiders forecast that the number of IPOs could rise in the first half of next year. Goldman Sachs Head of the Financial Sponsors Group in Europe, the Middle East and Africa Alasdair Warren is one of them. He told Financial News, "In the second half of this year we will have seen twice as many IPOs by number and almost three times as much by volume as we saw in the first half. As we move into the first half of 2014, we're only going to see an acceleration in the number of deals, especially from financial sponsors, and I'd expect the same multiplier to apply again."

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