IPO Eye Q2 2013

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Main Markets

Q2 delivered three more Main Market IPOs to go with the four Main Market IPOs in Q1. Encouragingly, there is also a number of other waiting in the wings; anticipated to come through in the next two quarters. It paints an exciting picture for 2013.

The listing of Partnership Assurance, the UK private-equity backed life insurer, grabbed the headlines this quarter, raising £485m.  Priced near the top end of its range at 385p, its offering was highly subscribed, and closed its first day of trading at 450p. The company’s market capitalisation of £1.5bn would imply it is in line for inclusion in the FTSE 250 index in the coming months, joining Countrywide and Crest Nicholson as 2013’s FTSE 250 offerings.

Al Noor Hospitals became the second UAE-based healthcare company to list on the Main Market, raising £221m and achieving a market capitalisation of £672m. Middle Eastern companies continue to be attracted to listing in the UK, despite rising equity values in their own home exchanges. The third Main Market admission was the investment company Platform Acquisition Holdings, backed by former City minister Lord Myners and billionaire Nicholas Berggruen, which raised funds of £581m. The pair had also been responsible for the flotation of an earlier investment company Justice Acquisitions Holdings in 2011, which ultimately acquired a large share in the fast food chain Burger King.


Q2 tends to be productive for AIM listings, and this quarter proved no exception, with 11 AIM deals taking place. Whilst the size of each offering has been small for the last two quarters (the largest was oil and gas explorer Lekoil Ltd which raised  £32m), it was encouraging to see four diverse technology companies coming to market: OneMedia (broadcasting technology), Quixant (slot machine technology), Electrical Geodesics (healthcare technology) and Outsourcery (cloud computing technology).

US-based broadcasting technology firm OneMedia’s offering raised £5m, showing small US technology firms’ growing preference to list on AIM, as opposed to NASDAQ where they risk getting lost alongside technology giants like LinkedIn.


The first five months of the year have seen ideal listing conditions, with average volatility stable, and the UK stock markets performing well. However, June saw a sudden rise in average volatility, and falling stock market prices, mainly as a result of the Fed setting out a framework for ending its third round of quantitative easing in June, and credit crisis problems in China.

Figure 1: FTSE Indices - 2013

FTSE Indices - 2013

It remains to be seen whether this will dissuade potential offerings; it was against this backdrop that Al Noor Hospitals successfully listed late this quarter. It went in at the lower end of its 575p-625p range, but still managed to receive a price/earnings multiple of 15 times, which was higher than its fellow UAE healthcare stock NMC, currently trading at a ratio of 13 times, and ended the quarter at 633p.

Partnership Assurance’s listing performance was one of the quarter’s highlights – it priced at the top end of its range (385p), and closed its first day at 450p (a 17% increase on offer price). Its market capitalisation implied a P/E ratio of 29 times its 2012 earnings, indicating that investors are willing to pay well for a quality proposition, and closed above its offer price at 26% at the end of the quarter.

Partnership Assurance’s market capitalisation of £1.5bn implies it is in line for inclusion in the FTSE 250 index in the coming months.

Platform Acquisition Holdings also closed above its offer price at 4% at the end of the quarter.

On the whole, AIM offerings performed relatively well on their first day of trading and posted positive gains. At the end of the quarter, only three of the eleven AIM companies closed below its offer price.