After everyone wraps up their summer holidays, firms tend to push ahead with their initial public offerings in September, and Germany is likely to see a few major IPOs between now and the end of the year.
Bastian Schiedat, the head of equity capital markets at Bankhaus Berenberg, expects at least five more IPOs, and maybe twice that many. He added that the volume of IPOs could total €5 billion to €8 billion ($5.8 billion to $9.2 billion) in the final months of the year. Even if the lower end of his prediction comes true, 2018 will be the best year for German IPOs in a decade.
Financial sources said Stuttgart-based engineering company Exyte is planning an IPO to raise up to €1 billion. The company, which is owned by Austrian billionaire Georg Stumpf and was known as M+W Group until recently, is to be listed on the Frankfurt Stock Exchange with a market capitalization of up to €3 billion. Mr. Stumpf is aiming to sell at least 25 percent of the shares to new investors in the flotation, the sources said, and 25 to 35 percent of the net income is to be paid out as dividends.
The company specializes in clean-room technology for the semiconductor industry, and its customers include Micron and Intel. That division made up around three-quarters of its total revenue, which last year reached €2.4 billion with adjusted earnings before interest and tax (EBIT) of €107 million. It has done well in the first six months, generating revenue of €1.7 billion and EBIT of €82 million. Exyte aims to be listed in the MDAX, preferred by medium-sized industrial firms.
The IPO of motorhome and caravan manufacturer Hymer could also be big. Its owners are prepared to sell a majority stake through a share issue or a direct sale to investors. Analysts said the group could be valued at €2.5 billion to €3 billion in a flotation. It sold some 62,000 vehicles worldwide in the fiscal year ending in August, and its revenue is projected at €2.5 billion, up about €400 million from the previous year. The company has formed a partnership with a manufacturer in China, where the public has increasing enthusiasm for camping holidays. This would be a second chance for Hymer, which was delisted and rebought by its founding family in 2013.
The year’s second-biggest flotation after Healthineers could be the IPO of Knorr Bremse, which makes brake systems for trucks and trains. The word in financial circles is that will likely go public in September or October. It could be valued at €12 billion, and about a quarter of shares are expected to be up for grabs, with the proceeds going to the family of owner Hermann Thiele.
Germany’s 14 IPOs so far this year have delivered a mixed performance. Siemens spinoff Healthineers has shone with a 40 percent gain over its issue price, and image processing firm Stemmer Imaging’s share price has increased nearly 50 percent. Deutsche Bank asset management unit DWS was supposed to be a strong follower, but its shares have since fallen by a fifth. A major IPO planned by scientific publisher Springer Nature was cancelled when it couldn’t fetch the desired price.
“The environment for increasing corporate earnings remains excellent,” said Christoph Stanger, the European equity capital markets lead at Goldman Sachs. “In the US alone, they have increased by around 20 percent because of the tax reform.”
He said European IPOs in the tech sector were significantly outperforming other sectors in terms of share gains. That could help Westwing, an online furniture retailer preparing to go public. It is 32 percent owned by Rocket Internet, Germany’s largest startup incubator, and its revenues jumped 22 percent to €120 million in the first six months of this year. Financial sources said the company was planning to sell up to €150 million worth of shares and that its total stock market valuation could reach €400 million to €450 million.
Robert Landgraf is the deputy head of Handelsblatt’s finance section and is based in Frankfurt. To contact the author: firstname.lastname@example.org