If I can make it there: European IPO candidates tempted by lucrative New York listings

Data InsightECM Explorer 22 September

If I can make it there: European IPO candidates tempted by lucrative New York listings

Tantalised by the USD 4.87bn IPO of UK semi-conductor company Arm [NASDAQ: ARM] in New York, European companies are back to circling US listings plans.

The hype around Arm and its USD 54bn valuation, which debuted last week, has crystallised attention among issuers who are exploring whether to list on their home exchanges or chase the American dream.

Several other European companies are also targeting a US IPO, with companies seduced by the valuation potential of being able to benchmark to high performing US peers, according to advisers in the market.

L Catterton-backed Birkenstock is planning to follow Arm across the Atlantic and has filed publicly for a NY listing. The company is hoping to sell a premium equity story with a hefty valuation projection of around USD 8bn, as reported.

In 2022, European companies listing in the US only generated deal volumes of USD 276m from four deals, according to Dealogic. In 2021, that figure was USD 15bn, powered by almost 50 deals.

Other standout cross-border years included 2013 (USD 3bn), 2014 (USD 6bn) and 2020 (USD 4bn).

UK-based companies have been the biggest contributor of US listings since 2003, hitting almost USD 20bn since 2003 with around 36 deals, followed by Russia, Germany and Greece, according to Dealogic.

Companies from other countries are now looking to join the party.

Permira-backed Golden Goose is exploring an IPO for 2024, and this news service reported that a NY listing would be the sponsor’s desired option.

Another Italian company, Neosperience [BIT:NSP], is expected to formalise an IPO prospectus for its Neosperience Health unit with US regulators in a matter of days, as reported.

“We are seeing some signs of life in public markets; if you reach a certain size, you want your IPO to be in the US, because the European markets won’t give you what you want,” an advisor at a conference noted recently.

In France, EcoVadis has mandated Eight Advisory to kick off preparatory work ahead of a possible IPO in New York by 2025-2026, as reported by this news service, citing a strong tech/SAAS investor base and its ambitions for growth in North America.

EcoVadis has a score of 49, according to Mergermarket's Likely to Exit (LTE) predictive algorithm.*

Still, these companies could be in for surprises – and not necessarily positive ones.

One ECM banker says European companies often fail to match up against US-listed giants.

“Some companies will operate in tech or in other supposedly US-friendly sectors and then find themselves stacked against Apple, Meta and the like,” said the banker. “This is the recipe for a secondary listing in their home countries a few years later.”

As ECM Explorer has noted in the past, European companies can quickly turn into orphan stocks on US exchanges.

Stock market expats can soon become repatriation candidates.

*Mergermarket's LTE predictive analytics assign a score to sponsor-backed companies to help track and predict when an exit could occur through M&A, an IPO, a direct listing or a deSPAC transaction.

Did you see last week’s ECM Explorer EMEA?

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