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Access to International capital for growth Accessing the London markets Tel-Aviv May 2014
Transcript of Access to International capital for growth - PwC · Access to International capital for growth...
Access to International capital for growth
Accessing the London markets
Tel-Aviv
May 2014
2
Our issuers operate in more than 115 different
countries across the globe
Source: London Stock Exchange statistics. Based on country of primary business.
60 +
40-59
20-39
1-19
Number of companies
3 Source: Dealogic, WFE, as of January 2014
*%Price Offer//Current - performance is market-cap weighted
**Transaction value - USD(m)
London is the leading market in EMEA
Number of IPOs
Money raised through IPOs (USDm)
Daily traded value** and number of transactions
Post-IPO performance* by Exchange
835
662
411
288
0
2,000
4,000
6,000
8,000
10,000
LSEG NYSE Eur EU Deutsche Börse Nasdaq OMX
No. of transactions (000s)
0
20
40
60
80
100
120
LSEG NYSE Eur EU NASDAQ OMX DB NYSE EurAmsterdam
0
5,000
10,000
15,000
20,000
25,000
LSEG NYSE Eur EU DB NASDAQ OMX NYSE EurAmsterdam
NA
-6.3
24.8
32.8
33.2
-10.0 0.0 10.0 20.0 30.0 40.0
NYSE EurAmsterdam
DB
NYSE Eur EU
NASDAQ OMX
LSEG
4
Money
raised (IPO)
(USD m)
Jan-Apr
2013
Jan-Apr
2014
%
change
Main Market 2,989 9,788 227%
AIM 83 2,353 2735%
Total 3,072 12,141 295%
Follow on
issues
(USD m)
Jan-Apr
2013
Jan-Apr
2014
%
change
Main
Market 7,467 18,502 148%
AIM 1,030 2,079 102%
Total 8,497 20,581 142%
Number of
IPOs
Jan-Apr
2013
Jan-Apr
2014
%
change
Main Market 9 22 144%
AIM 10 25 150%
Total 19 47 147%
Source: Bloomberg and Dealogic, as of 30 April 2014
Jan-Apr refers to the period January 1st 2014 – April 30th 2014
0
10
20
30
40
50
60
0
5
10
15
20
25
30
35
40
45
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
VF
TS
E
Dea
l va
lue
in
GB
Pb
n
Further issues New issues VFTSE
London new issuance market extremely active…
Date Company
name Sector
Private Equity
Sponsor(s)
Mkt cap at
IPO £m
IPO size
£m
Secondary
portion of
Offering
(%)
Price Chg
since IPO
(%)
10-Feb-14 Manx Telecom Telecom HgCapital 163 159 87 14.8
25-Feb-14 McColl's Retail
Group Retail Coller Capital 333 138 63 -12.3
27-Feb-14 DX Group Logistics Arle Capital Partners 334 209 8 26.0
14-Mar-14 Gulf Marine
Services Transportation Gulf Capital 473 179 60 20.0
28-Feb-14 Lenta Retail TBG, VTB 2,590 587 100 -5.0
17-Mar-14 Poundland Retail Warbug Pincus 1,252 391 100 19.9
17-Mar-14 Pets at Home Retail KKR 2,044 511 5 -8.9
28-Mar-14 Brit Insurance
Holdings NV Insurance
Apollo,
CVC Capital Partners 1,689 290 91 -8.8
3-April-14 Just Eat Consumer Index Ventures
Vitruvian Partners* 1,468 361 72 -13.1
11-Apr-14 Cambian Group Healthcare GI Partners 392 197 90 0.6
11-Apr-14 Exova Group Professional
Services Clayton Dubilier & Rice 556 223 50 1.0
11-Apr-14 Polypipe Chemicals Caird Capital 496 297 100 7.9
The London market continues to feature financial sponsor deals in 2014
• 2014 continues to see a favourable market for private equity-backed UK IPOs on the
London market with 12 businesses successfully floating YTD and raising a combined
£3.5bn ($5.7bn)
• Upcoming floats have been widely covered by the press, including, Saga, Travelex,
Card Factory, and many others
Source: Bloomberg, Dealogic, April 2014
* Other Financial Sponsors include: SM Trust, Redpoint Ventures and Greylock Partners
2014YTD Money raised at IPO by
deal type
Financial sponsor-backed
IPO 50%
Non financial sponsor-backed
IPO 50%
London is a Leading Venue for Financial
Sponsor-backed IPOs…
2) Benefits of a London listing
6
7
Start - Up Early Stage Expansion Consolidation &
further capital raising
Diversification of investors, M&A
and International Expansion
EU Regulated
Concept &
seed stage
Fu
nd
ing
re
qu
ire
me
nt
£500k
£1m
£100k
£50k
£150m
£1bn
Not public Exchange regulated Market
designation
Strategic consideration
Official List & EU Regulated
A choice of routes to market to cater for all
sizes, strategies and development stages
8
Equity AUM held in international portfolios, by exchange Q1 2014*
Source: Facset and LSE calculation
*international portfolios defined as investment in companies different to the country of domicile of the portfolio manager
Top institutional investors holdings
by country (as at end Q1)
London
Hong Kong
US
Regions with
increased exposure
compared to previous
quarter are in green,
and decreased in red,
unchanged in black
4%
2%
3%
-1% 4%
-2% 2% -8% 2%
-2%
-
200
400
600
800
1,000
1,200
LSE NYSE NASDAQ HKSE NYSEENXT Paris
ASX NYSEENXT Ams
Bovespa TSX SGX
US
Db
n (
% c
ha
ng
e t
o Q
4 2
013)
UK 43%
EMEA (ex-UK)
16%
North America
28%
Asia Pacific 11%
Lat America
2%
UK 4%
EMEA (ex-UK)
7%
North America
83%
Asia Pacific
6%
China 33%
Asia Pacific
(ex-China) 55%
North America
5%
EMEA 5%
Lat America
2%
• London’s strength in supporting international companies improved in the last quarter with 4% increase in
international AUM managed out of London, more than any other financial centre. This is the third consecutive
quarter that London investors increased their investment in international companies.
• London listed companies continue to enjoy support of investors based outside London. North American investors
have increased their holdings of the LSE listed securities second quarter in a row and now account for almost a
third of equity investment based in London. After increases in the last quarter European investors kept their
positions of LSE equity unchanged, while LatAm investors have increased their positions in London listed stock
by 1%.
8
…And remains the heart of international investment
9
London provides enhanced analyst coverage
across all sectors
Source: Bloomberg, March 2014. Data covers average analyst coverage across listed companies.
Note: ICB sector classification
Average number of analyst recommendations following listed companies, by listing venue
0
5
10
15
20
25
30
35
40
LSEG NYSEEuronext
US
Nasdaq HKSE TMX NYSEEuronext
EU
Banking Sector
0
5
10
15
20
25
30
LSEG TMX NYSEEuronext
US
HKSE Nasdaq
Oil andGas
0
2
4
6
8
10
12
14
LSEG NYSEEuronext
US
TMX NYSEEuronext
EU
Nasdaq
Diversified Industrials
Technology and Healthcare (by market cap)
0
5
10
15
20
25
30
35
$0-50m $50-100m $100-250m $250-500m $500-1,000m $1,000-5,000m $5,000m+
LSEG NYSE Euronext US Nasdaq
10
Cost of listing in London is further
reduced by:
• Regulation which is widely
tested and balanced
• Highly competitive legal
services which have experience
of listing process
• Timing of the admission process
is clearly communicated
• Direct communication with the
regulator and the Exchange
• All disclosures in English
London is the most cost effective option amongst
major exchanges
Comparison of underwriting costs
Based on gross underwriting fees % (excluding AIM).
Source: Dealogic, LSEG data – April 2014
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
2008 2009 2010 2011 2012 2013 Q12014
LSEG NYSE Eur US NASDAQ ASX TMX HKSE
11
2) Technology sector in London
90
95
100
105
110
115
Dec-13 Jan-14 Feb-14
Index p
oin
t re
based to 1
00 a
s o
f Jan-1
4
FTSE Digital Services Index FTSE AIM Digital Services Index
FTSE All Share Technology Index FTSE AIM All Share Technology Index
Digital and Technology on London Stock Exchange
Source: Bloomberg, Dealogic and LSE data, March 2014
*Companies with > GBP 20m mkt cap; UK companies unless stated in brackets;
• In the last 12 months, 29 digital companies listed,
raising c£1bn at IPO with an aggregate market
capitalisation of c£3.7bn
• Currently 362 technology companies listed on LSE, with
market capitalisation of £1.1tr
Recent digital businesses
IPOs*
Mkt Cap
(GBPm)
Money Raised
(GBPm)
AO World 1,474 507
Plus500 (Israel) 636 47
Manx Telecom (Isle of Man) 182 159
Servelec Group 179 125
JQW (China) 173 7
Quixant 92 4
Frontier Developments 92 4
Arria NLG (US) 90 6
Rightster Group 83 20
IBEX Global Solutions (US) 80 10
GameAccount Network 78 23
Keyword Studios (Ireland) 65 26
Digital Globe (US) 61 13
CentralNic 46 7
Netscientific 46 30
Macromac (Malaysia) 41 1
CityFibre Infrastructure 40 17
Outsourcery 38 12
Kalibrate Technologies 37 13
Electrical Geodesics (US) 34 8
SYQIC (Malaysia) 24 3
EU Supply 22 5
Recent FTSE Digital and Technology indices performance
• High Growth Segment: an additional route to LSE’s Main Market providing greater choice to
growth businesses
o On the 3rd April 2014, Just Eat became the first company to list on the HGS
• Inclusion of AIM shares in ISAs since 5 August 2013, helping to increase retail investor activity
and liquidity in growth companies
o 20% uplift in FTSE AIM All Share since change compared to minimal movement in FTSE 100
• Dedicated digital index launched by FTSE – supporting liquidity and visibility of the sector
• Removal of stamp duty tax on growth markets (AIM & HGS) expected on 28 April 2014, likely
to bring additional liquidity and lower cost of capital to growth companies
• ELITE: a new initiative to support growing businesses and facilitate long term structured
engagement between them and the adviser and investor communities – to be launched on 28 April
Enhancing public markets for digital companies
Return of investor confidence and recent market developments supporting technology and digital businesses
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Technology companies on our markets
Market Cap profile of technology companies on our markets
ICB Sector AIM Main Market
Electronic & Electrical Equipment 30 21
Fixed Line Telecommunications 6 18
Mobile Telecommunications 8 8
Software & Computer Services 91 25
Technology Hardware & Equipment 18 19
Other technologies* 20 6
Total Number of Companies 173 97
Total Market Cap (£bn) 15.7 625.3
• There are currently 270 tech** companies listed on our
markets worth around £641bn
• Recent IPOs have been from innovative, fast growing
companies including: Just Eat (£360m), AO World
(£507m), boohoo.com (£300m), Manx Telecom (£156m)
Servelec (£125m), Tungsten Corp (£160m), Plus500
(£50m), CentralNic (£7m), Cambridge Cognition
Holdings (£11m), Keywords (£28m), Wandisco (£15m)
• High Growth Segment: an additional route to LSE’s Main
Market providing greater choice to growth businesses. On
the 3rd April 2014, Just Eat became the first company to
list on the HGS
Source: London Stock Exchange statistics, April 2014
Figures in brackets refer to money raised at IPO
* ’Other technologies’ includes the following additional ICB sectors: Chemicals, Equity Investment Instruments, Financial Services, General Retailers, Media, Support Services,
Leisure Goods, Industrial Engineering, Household Goods & Home Construction, Travel & Leisure.
**not including Healthcare Equipment & Services or Pharmaceuticals & Biotechnology ICB sectors
£0-5m £5-10m £10-50m £50-100m £100-500m £500m-£1bn £1-5bn £5-10bn £10bn+
AIM 29 19 61 27 30 5 2 0 0
Main Market 3 1 4 7 22 15 31 4 10
0
10
20
30
40
50
60
70
No
. o
f co
mp
an
ies
14
Technology Sector Performance
In the last 3 years, the technology sector has performed well in the UK with the FTSE AIM All Share Technology Index and the
FTSE All Share Technology Index consistently outperforming the FTSE 100 and All Share Indices.
Source: Bloomberg, April 2014 – index points rebased to 100 as of January 2011
70
90
110
130
150
170
190
Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14
FTSE 100 FTSE 250 FTSE ALL SHARE FTSE ALL SHARE TECH FTSE AIM ALL SHARE TECH
15
4) AIM overview
16
0
2
4
6
8
10
12
14
16
18
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Further New
123 145
107 75
102
277
177 160 162
355
519
462
284
114
36
102 90 71
99
26
0
100
200
300
400
500
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
UK
Int'l
8 13
39
133 136
173
214
150
122
80
1bn+500-1bn250-500m100-250m50-100m25-50m10-25m5-10m2-5m0-2m
Profile of AIM companies Admissions to AIM – 1995 to March 2014
Fundraisings on AIM – 1995 to March 2014 Industries represented – by number of companies
1,094 companies,
aggregate value of
£78bn
A snapshot of AIM
Over 3,450
companies raising
£38bn at admission
£86bn in total
(£48bn through
further issues)
Source: LSE statistics, March 2014
26 companies either suspended or undetermined value
Oil & Gas, 132
Basic Materials, 179
Industrials, 191
Consumer Goods, 63 Health Care, 68
Consumer Services, 110
Telecommunications, 15
Utilities, 15
Financials, 210
Technology, 111
*ICB industry classification
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17
Liquidity and investors
Number of companies in each index and market cap group
Market cap Range FTSE AIM All
Share FTSE All Small
£0-25m 428 38
£25-100m 243 86
£100-500m 131 222
£500m+ 12 17
Total 814 363
AIM companies have comparable levels of daily liquidity to their Main Market peers
Source: Data from Bloomberg and FactSet (6 month average daily value traded). Liquidity Analysis shows median within each market cap range.
• AIM companies are supported by a deep
pool of institutional capital, as well as an
active retail investor base
• There is a dedicated network of market
professionals (brokers, research analysts,
advisors)
• The FTSE AIM 100 (which includes the 100
largest UK AIM companies) was the best
performing UK index in 2013
*NB: The FTSE All-Small Index consists of all the companies in the FTSE SmallCap and FTSE Fledging indices
90
95
100
105
110
115
120
125
130
Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14
FTSE 100 FTSE All Share FTSE AIM 100 FTSE AIM All Share
0.00%
0.10%
0.20%
0.30%
0.40%
0.50%
0.60%
£0-25m £25-100m £100-500m £500m+Avg d
aily
valu
e t
raded a
s %
of m
ark
et cap
FTSE AIM All Share FTSE All Small
The benefits of the AIM network
Access to
capital
Wide support network
Profile
Diverse & deep
pool of capital
Strong support
from institutions
Nominated advisers
Accountants
Lawyers
Banks/Brokers
Analysts
Financial PR / IR
Media
Visibility
Bargaining power with
customers & suppliers
Marketability of stock
Global peer group
19
The AIM framework: admission & ongoing
responsibilities
Key eligibility requirements
Eligibility criteria
• Appointment of nominated adviser
• No minimum track record requirement or free float criteria, but company must demonstrate
appropriateness to join a public market
Admission documents
• Pre-admission announcement at least 10 business days prior to admission
• AIM admission document
• Nomad declaration of appropriateness
Rulebooks • AIM Rules for companies and nominated advisers
Corporate governance • Adoption of corporate governance measures as appropriate for the business
• UK Corporate Governance Code / QCA Corporate Governance Code as best practice
Continuing obligations
Adviser • To retain a nominated adviser at all times, failure to do so may result in suspension in the
company’s shares
Periodic reporting • Audited Annual Report
• Half yearly financial report
Disclosure requirements
• Price sensitive information to be made public without delay
• Significant shareholder notification
• Directors’ dealings notification
• Company website with up-to-date regulatory information
Corporate transactions
• Class tests to assess transactions
• Notification of substantial transactions, related party transactions
• Shareholder approval for reverse takeovers, fundamental disposals & cancellation
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Selected IPO Case Studies
20
21
Examples of recent European transactions
Mar 2014
AIM Digital Marketing
Mar 2014
AIM Hotel Chain
Feb 2014
Main Market Real Estate Fund
Jan 2014
AIM General Industrials
Dec 2013
AIM Mining
Nov 2013
Main Market Oil & Gas
Oct 2013
Main Market CEE Beverages/Spirits
Jul 2013
AIM Online Financial trading
Jul 2013
AIM CEE Real Estate Fund
Apr 2013
Main Market Beverages
Nov 2013
AIM
Mobile Gaming
Nov 2013
AIM Online Business Services
April 2014
AIM Mobile Payment
Feb 2014
AIM Real Estate
April 2014
AIM Fashion
Playtech was admitted to AIM in 2006 raising
an initial $424m at IPO. Since then, the
company has enjoyed strong growth both in
terms of profitability and in its market
capitalisation
Since floating on London Stock Exchange,
Playtech has undertaken a number of
different transactions including: joint venture
licensing deals, and acquisitions (Sportech,
GTS, and Virtue Fusion).
Whilst on AIM, Playtech returned to the
market on two separate occasions raising a
combined $339m. In July 2012 Playtech
moved to the Main Market and has seen its
share price climb 30%
Company Details
Company Playtech Ltd
Market Main Market
Sector Travel & Leisure -
Gambling
Trading System SETS
Ticker PTEC
Country of
incorporation UK
Transaction Details
Admission date 02 Jul 2012
Money raised at
admission $424m
Market cap at
admission on AIM $877m
Market cap at
admission on Main
Market
$1.6bn
Current Market cap $+3bn
Leading Investors Value held $m
Capital Research & Management Co. (Global
Investors) 218.6
BlackRock Investment Management (UK) 179.8
Greenlight Capital 135.8
FIL Investments International 130.9
Scottish Widows Investment Partnership 39.5
JPMorgan Asset Management (UK) 37.2
Norges Bank Investment Management 31.8
Odey Asset Management 29.8
Investec Asset Management 24.2
Legal & General Investment Management 22.3
Company profile
Playtech is a leading international designer,
developer and licensor of software and services
for the online, mobile and land-based gaming
industry. It offers cutting edge, value-added
solutions to the online gaming industry's top
operators
Founded in 1999, the Company has over 2,400
employees principally located in five countries
and engaged in research and development of
current and future gaming technologies or in
providing marketing support and other ancillary
services.
Playtech’s leading gaming applications include
casino, poker, bingo, sports betting, live, mobile
and social gaming, as well as VLTs and FOBTs,
casual and fixed odds games.
Listing story
Source: Factset and LSE data, March 2014
Case Study:
Playtech
22
Move to the
Main Market
Page 22
Plus500 raised US$25m whilst the selling
shareholders also sold US$50m in the IPO to
over 45 institutions in one of the biggest
placings on AIM in 2013 to date.
Liberum, acting as Nominated Advisor and
Broker for the company, held over 60 investor
meetings and the fundraising was more than
twice oversubscribed; subsequently the deal
size was increased due to over-demand.
Since IPO, the share price performance has
been very strong, driven by investor demand
for yield and now stands at a 15% premium
to the listing price of 115p.
Company Details
Company PLus500 ltd
Market AIM
Sector Investment
Services
Trading System SETSqx
Country of
incorporation Israel
Transaction Details
Admission date 24 Jul 2013
Money raised at
admission $75m
Market cap at
admission on AIM $219m
Current Market cap $+1bn
NOMAD Liberum Capital
Company profile
Plus500 Ltd. is a holding company, engaged in
the development and operation of online trading
platform. It provides contracts for difference to
retail customers to trade in underlying financial
instruments such as equities, exchange traded
funds, foreign exchange, indices, and
commodities.
The company was founded by Omer Elazari,
Alon Gonen, Gal Haber, Elad Ben Izhak, Shimon
Sofer, and Shlomi Weizmann on May 26, 2008
and is headquartered in Haifa, Israel.
Listing story
Source: Factset and LSE trading data March 2014
Case Study:
Plus500
23
Leading Investors Value held $m
Odey Asset Management LLP 10.9
Hargreave Hale Ltd. 8.5
Newton Investment Management Ltd. 6.3
Artemis Investment Management LLP 3.8
Goldman Sachs & Co. 3.3
Northern Trust Global Investments Ltd. 3.0
Miton Capital Partners Ltd. 2.9
Rathbone Investment Management Ltd. 2.8
Majedie Asset Management Ltd. 2.2
JPMorgan Asset Management (UK) Ltd. 1.8
+450% in 8 months
Page 23
Company Details
Company Safecharge
International Group plc
Market AIM
Sector Support Services
Trading System SETSqx
Country of
incorporation British Virgin Islands
Transaction Details
Admission Date 2 April 2014
Money raised at
admission $126m
Market Cap at offer $404m
Current Market Cap $414m
Lead Managers Shore Capital
Company profile
Founded in 2006, SafeCharge has become
one of Europe's leading clearing companies,
with a focus on the gaming industry as well
as online trading companies within the FX
space (Forex, Binary Options). It provides
payment services, risk management and IT
solutions to simplify online and mobile
payments.
Between 2010 and 2013 the total value of
transactions processed by the Group on
behalf of merchant clients increased from
US$1.6bn to US$4.8bn.
Employs 200 people in: UK, Cyprus
Bulgaria, Austria and Germany.
Listing story
Safecharge’s initial plan was to raise
USD100mln, but ended up raising 25% more
due to strong investor demand.
2nd IPO of Teddy Sagi (Israeli billionaire)
who is also a majority owner of Playtech one
of the world’s leading gaming software
companies
The company will use the proceeds for both
organic and inorganic growth
Post-IPO ownership structure will se Teddy
Sagi
Case Study:
Safecharge
Source: FactSet, April 2014
24
Post-IPO insiders/Investors Value held
£m
Teddy Sagi 66.7%
David Avgi(CEO) 2.9%
JP Morgan Asset management 6.3%
Henderson Global 5%
Company Details
Company JUST EAT
Market HGS
Sector Specialty Retailers
Trading System SETS
Country of
incorporation UK
Transaction Details
Admission Date 3 Apr 2014
Money raised at
admission £360m
Current Market Cap USD 2.9bn
Lead Managers Goldman Sachs
JP Morgan
Company profile
Just-Eat.co.uk provides online takeaway
ordering services to web surfers with some
restaurants they could choose from.
The Company has a leading position in the
majority of the 13 markets in which it
operates, including the U.K., Denmark,
France, Canada, Ireland and Spain.
Since the first Just Eat website was
launched in 2001, the company has grown
significantly, predominantly organically but
also via selected acquisitions and today
partners with over 36,000 takeaway
restaurants globally.
The Company was founded in 2001 and is
located in Borehamwood, United Kingdom.
Listing story
Just Eat is the first company to be admitted to
LSE’s High Growth Segment.
The company, which operates the world’s
largest online marketplace for restaurant
delivery , raised £360 million at IPO, making
it the largest internet company to float on
London Stock Exchange 2014YTD.
The Offering consisted in £100m primary
offering together with secondary offering
tranche of between £70m and £200m.
Selling Shareholders include SM Trust, Index
Ventures, Vitruvian Partners, Redpoint
Ventures and Greylock Partners.
Case Study:
Just Eat
Source: FactSet, April 2014
Price performance is intraday and refers to the IPO date 25
Source: FactSet and Dealogic – March 2014
Company profile
Circassia is a clinical-stage biopharmaceutical
company focused on the development and
commercialisation of a range of immunotherapy
products for the treatment of allergies.
Circassia’s lead product, Cat-SPIRE (for the
treatment of cat allergy), is in Phase III
development and a further three products have
completed Phase IIb studies, as well as a
pipeline of earlier-stage programmes.
The company was founded by Steven Harris
and Charles Swingland in 2006 and is
headquartered in Oxford, United Kingdom.
Listing story
The IPO was priced at 310p on 13th March –
at the top of the 250-310p price range.
The offering comprised 64m Ordinary
Shares (raising gross proceeds of approx.
£200m) and 2.9m existing Ordinary Shares
to be sold by the Selling Shareholders
(raising secondary proceeds of approx.
£9m).
Free float (pre-greenshoe) of 34.4%.
The Company intends to use the net
proceeds of the IPO to bring its lead product
candidate to market and significantly
advance the clinical development of its other
three clinical stage product candidates.
Top 3 Institutional Investors Value held £m
Invesco Asset Management 210
Odey Asset Management 71
Lansdowne Partners 40
Company Details
Company Circassia Ltd
Market Main Market
Sector Biotechnology
Trading system SETS
Ticker CIR
Country of
incorporation UK
Transaction Details
Admission date: 18 Mar 2014
Money raised at
admission £234m
Market cap at
admission USD 905mln
Lead Managers JP Morgan
Peel Hunt
Case Study:
Circassia
26
Key statistics
Avg Daily Vol (Last 3M) 2,039,512.60
Market Value (£m) 591
Entity Value (£m) 562
Shares Out (m) 187
Current Free Float 85.90%
Institutional ownership 54.50%
Page 26
27
Prepare ahead
Early Look
Investor
Engagement
In an increasingly crowded primary market calendar, early preparation is critical
Very hard to accelerate an IPO process, so early preparation enhances ultimate timing flexibility
As activity increases, pressures / bottlenecks are likely to increase within advisory community – choosing the right advisers therefore
increasingly important
Buyside fund managers have been vocal in the past about wanting to meet management teams ahead of an IPO
This practice of “early look” engagement with a number of the key investors has been very valuable:
Feedback for the Company and owners at an early stage on the business model, the management team and likely valuation
parameters
Investors get an opportunity to build a rapport with management at this early stage, enhancing their likely participation at the IPO
Information at this stage can be carefully managed, such that management teams are not held to specific forecasts later at the time of the
IPO
Demand
Patterns have
Shifted
In recent UK IPOs, participation from US investors (who are significantly underweight Europe still) has typically totalled 30-50% of gross
demand
Appetite from retail both directly (spill-over from Royal Mail effect) and through intermediaries has been strong and merits real
consideration, especially for consumer-oriented businesses
Important to consider complementary distribution platforms in IPO syndicates to tap all of these pockets
Appetite Broad
Based
We have seen transactions over the last 12 months across all sectors – quality businesses will be well received
Royal Mail and Merlin IPOs, as well as jumbo placings in Lloyds Bank, Direct Line, indicate capacity for significant sized transactions
Particularly successful have been consumer-facing companies with strong brands (Countrywide, Foxtons, Conviviality / Bargain Booze)
Secondary components at IPO have been accepted, but the best performers (Countrywide, HellermanTyton, Stock Spirits, Foxtons) have
seen further monetisations since IPO at substantially improved price levels
Observation Comment
Lessons Learned from Recent IPOs
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