In the past week, UK roofing company Marley and fitness chain Pure Gym became the latest PE-backed companies to shelve plans to go public, suggesting Europe’s recent IPO boom may be cooling off.
Marley, which was acquired by Inflexion Private Equity in 2019, originally planned in September to go public at a reported £500 million valuation. But on Tuesday, it scratched its plans, citing market volatility. Two days later, Leonard Green & Partners-owned Pure Gym was said to be looking to call off its £1.5 billion IPO, amid unease about market conditions.
Companies on the European mainland have also struggled in recent days. Dutch ecommerce company Cool Blue, backed by Netherlands-based firm Hal Investments, postponed its IPO on Wednesday. But European PE-backed listings were being called off as early June, when Parts Holding Europe, a French car parts distributor backed by Bain Capital, scrapped its listing plans for the second time.
Meanwhile, some offerings that did hit the market have underperformed. Earlier this month, Eurowag, a Czech trucking services company backed by TA Associates, saw its shares fall 10% on its first day of trading.
For much of the year, PE exit activity—including public listings—has been on a tear. According to the Q3 PitchBook European PE Breakdown, PE firms in the third quarter completed 425 exits worth a total €126.4 billion, an increase of 96% and 203%, respectively, from the same period a year ago.
However, public listings accounted for 21% of the third quarter’s exit value compared to nearly 40% in the first quarter.
Despite that shift, PitchBook senior analyst Dominick Mondesir said liquidity in the system remains high.
“PE exits tend to be very opportunistic,” Mondesir said. “Investors will be taking a wait-and-see approach as the economy enters a new phase of pandemic recovery, with varying fiscal stimuli winding down.”
Read more on this subject in the Q3 PitchBook European PE Breakdown.
Featured image by Chris J. Ratcliffe/Getty Images
Learn about our editorial standards.
