There is no such thing as “too early” in the world of equity capital markets banking, especially when conditions look unappetising for new deals. In such a case, you simply move on and plan for the next issuance window and several dealmakers are building a robust deal pipeline for 2024.
“For us, it is vital to position now as early as possible,” said one ECM banker, anticipating that 2024 is already shaping up to be a good year.
The big beasts of the year are likely to include the listings of Renault’s electric vehicles unit, Ampere, in France, Feralpi in Italy, and bus operator Flix in Germany, whose outcomes are likely to drive sentiment and impact issuance more than other situations.
But there are plenty of other possible new listings catching the eye for next year.
Italy to be busy again
Italy has been one of Europe’s busiest IPO markets in the past two years and banks are already eyeing up 2024.
Early meetings have been booked with Granarolo, the Italian food cooperative group which generated EUR 1.5bn in revenues in 2022, with advisers involved in the talks hoping that the company will opt for a listing sometime in 2024.
The group’s chief financial officer Cecilia Martire has a background as an EY consultant who advised on IPOs, making her a good steward for a listing, a source said. Intesa Sanpaolo has a close relationship with management at Granarolo, having previously invested in the company, making it a frontrunner for an advisory role, according to another source.
Another Italian firm, international trade fair and events company BolognaFiere, is a 2024 IPO candidate that has met with banks in previous months, but is yet to appoint an advisor.
If market conditions are right, management could attempt a Euronext Growth Milan listing as soon as the end of the year or the first months of 2024. The events sector is recovering following the end of COVID-imposed lockdowns and the company has international ambitions, one of the sources who met with management noted.
In Italy, advisers are still hoping that Permira will consider an IPO for Golden Goose, as reported, even though a sale to another private equity firm could be the more straightforward choice for the owners.
Early talks on German deals
Germany is also presenting some new opportunities for ECM professionals, with two advisers calling Vibracoustic, the vibration technology business owned by Freudenberg, the German industrial group, a realistic comeback candidate for late 2024 after it previously pulled its IPO plan in 2019.
While conversations with management about opportunistic plans have been ongoing, the possibility of an IPO was also raised by CEO Mohsen Sohi earlier this year; however, he said the business is well financed and he would not push an IPO at any price.
Meanwhile, BASF [ETR:BAS] has resumed talks with external advisors ahead of a potential sale, or listing, of its stake in German oil gas giant Wintershall Dea, but it is unlikely to make progress on its plans before next year due to internal reorganisation.
One of the advisers said that there are hopes for a listing of the battery unit PowerCo from Volkswagen Group after investor interest, a development mooted by management early this year that according to the advisers would prompt coveted advisory roles in Germany.
He added that while expressions of interest have been raised, there has not been any formal invitation to pitch yet.
We’ll always have Paris
While France braces for the IPO of Ampere in 1Q24, advisers are also scoping out other opportunities.
Two advisers highlighted Ynsect SAS, a French insect-farming company, as an attractive listing candidate in late 2024 or early 2025. They said management has an ambitious growth plan and needs capital to implement its strategy.
Achieving profitability is a key priority for management, a source familiar with the company said.
Another name on many advisers’ lips is Ecovadis, a Paris-based provider of globally trusted business sustainability ratings, which has previously raised money from GP Bullhound.
One banker noted that sustainability ratings represent a strong growth story and an alternative spin on traditional ESG category candidates, and a source familiar said the company is “on fire” when it comes to growth prospects, especially in jurisdictions such as the US and Japan.
An IPO is clearly on the agenda, this source added, but IRR targets first need to be achieved to launch a deal.
“What we are seeing is a wide variety of companies, from renewables to industrial, and in some cases tech companies not seen for a while, that are becoming again more trusting of the capital markets to grow,” one adviser noted. “You never know when the deal is likely to launch, but to us execution is only a part of the work – getting the company ready is the bulk of it and this type of work starts now.”
With the summer heading to a close, busy days are lining up again.
Granarolo, Vibracoustic did not respond to requests for comment. Ynsect and Ecovadis declined to comment.