IPO activity in Europe proved strong, driven by e-commerce and technology listings | White & Case srl
While IPO activity was robust across Europe, the Nordic region stood out
It was a record year for IPOs of European companies, following the global trend. A total of 476 European companies were listed last year, excluding SPAC. Together they raised US$90 billion. This represented increases of 156% and 253%, respectively, over 2020.
It was, by far, the busiest year ever for European company IPOs, even not counting SPACs, which also had a banner year – 64 European SPACs listed in 2021, raising a total of 13, 8 billion US dollars. This represented annual growth of 392% and 339%, respectively (see “A rollercoaster year for SPACs” on p. 6 for more on SPACs).
The percentage year-over-year increase in value of the European IPO market in 2021
The range of companies entering the market last year was remarkably wide. Indeed, each of the five largest IPOs of the year involved a different industry. From transport to telecommunications and from technology to machinery, companies in all market sectors have been able to raise funds.
InPost leads the way
The biggest deal of 2021 involving a European company saw Polish logistics operator InPost listed on Euronext Amsterdam in an IPO raising US$3.9 billion, highlighting the huge demand from companies offering exposure to the booming e-commerce market and the supply chains that support it. .
The second largest IPO of a European company also played an important role in the structural transformation. Volvo Cars has raised US$2.7 billion in a Nasdaq Stockholm listing that will support the Swedish carmaker’s move towards electric cars as the industry shifts to cleaner technologies in the face of climate change.
Similarly, Vantage Towers benefited from another market development. The company, created by telecoms giant Vodafone, builds and operates the infrastructure that allows mobile networks, which carry growing data traffic, to operate across Europe. Its IPO, with a listing in Frankfurt, raised $2.6 billion last year.
Tech IPOs surge, followed by finance and life sciences
Overall, technology was the most active sector for IPOs last year, with 162 new issues raising US$27.5 billion. As in other markets, these numbers include a number of companies that are better described as technology-focused rather than pure technology players. For example, the biggest IPO of the year in the sector was that of Allfunds, which operates an online marketplace for the investment industry, connecting asset managers with clients. such as retail banks and wealth managers. Allfunds, which is based in Spain, raised $2.6 billion.
In second place, life sciences companies were also market favourites; the sector has completed 65 IPOs that have raised US$8.9 billion. Transactions such as the US$974 million listing of animal health group Vimian and the US$932 million IPO of Swiss drugmaker PolyPeptide underscored investor demand for exposure to the science sector. the life.
Financials was the third-largest sector contributor to last year’s IPO numbers, with 33 new issues raising $7.8 billion in total. The sector continues to see consolidation and innovation, particularly in fintech, but there is also growing interest in IPOs from companies that previously preferred to remain private. In particular, the US$1.2 billion IPO of British private equity firm Bridgepoint turned heads last year. After Swedish EQT AB’s strong stock market performance since its listing in 2019, the Bridgepoint deal was another success for the private equity industry.
Sweden was second to the UK in IPO volumes last year, amid growing demand from companies in the Nordics.
Nordic countries prosper as UK opposes Brexit
The Vimian deal was among Sweden’s biggest IPOs of 2021 in a boom year for new issues in the country, which also included listings for Volvo Cars and oat milk producer Oatly. Sweden was second to the UK in IPO volumes last year, amid growing demand from companies in the Nordics.
This represented a continuation of the booming IPO market seen in the Nordic region for several years now, with a strong startup community, supportive regulation and a healthy domestic institutional investment industry all contributing to this performance. The very strong performance of the Swedish stock market in particular last year – up 23.5% – also encouraged IPO activity, and issuers in the region were praised for their rapid adaptation to the pandemic; they were the first to adopt tools such as virtual roadshows, for example.
In the UK, Brexit uncertainties do not appear to have dampened the IPO market. Last year, 133 UK company IPOs, nearly a quarter of Europe’s total volume, raised $25.3 billion. This is an increase of 209% in volume compared to the previous year and 204% in value.
Although a few IPOs have performed poorly in the secondary market – food delivery company Deliveroo, for example, saw its share price trade around 33% below the listing price a month after the listing price. listing, and e-commerce group The Hut Group (THG) has also been trading below its IPO price since listing in January 2021, the London Stock Exchange has continued to attract a number of tech and high-growth issuers including Oxford Nanopore, Wise, Darktrace and Trustpilot.
In addition to tech IPOs, the LSE still attracts listings from other sectors, as well as listings from overseas issuers. Singaporean food company Olam International, for example, last year announced plans to apply for a dual listing in London and Singapore in the second half of 2022.
Events in Ukraine throw markets into turmoil
Even under normal circumstances, IPO activity in Europe would have struggled to reach the same heights as the 2021 blockbuster, but events in Ukraine have only further reduced the potential for listing activity. In the region. Stock markets in Europe are likely to remain volatile for as long as the situation lasts, especially given Europe’s energy dependence on Russia. Soaring oil and gas prices and potential shortages could impact the rest of the economy and further destabilize equity markets. As such, new listing activity is likely to be subdued until later in the year.
Over time, however, listings should return. Although central banks are poised to raise interest rates this year, any hikes will be modest and investors’ alternative options will be limited. Major secular trends such as digitalization and the energy transition will give new impetus to the new quotations. As long as volatility subsides, quotes should return to European markets.