EY’s latest IPO Eye report shows more funds were raised in the first quarter of 2021 than in the same period since 2007. The 12 main market and eight Aim IPOs raised a total of £5.6 billion, more than half of the £9.4bn raised in the whole of 2020.
The performance during the first three months of 2021 is in stark contrast to the same period in 2020 when there were just three IPOs on the main market and two on Aim, which raised a combined total of £615 million – nine times lower than this year’s opening quarter.
Mike Timmins, EY’s Scotland IPO leader, said prospects for the IPO market continue to be positive.
“The markets have successfully weathered the effects of Brexit and bouncing back from the stall in activity caused by the onset of the pandemic a year ago,” he said.
He welcomed the two flotations seen in Scotland during the period. AMTE became the second Scottish firm to list on Aim within six months following telecoms firm Calnex last autumn.
The Thurso-based company, which works with leading motoring industry names such as Cosworth and Williams, secured £13.7m from existing and new investors, nearly twice the £7m it was originally seeking and will use the proceeds to finance working capital requirements.
Ready meal business Parsley Box, based in Edinburgh, also went on to raise £17m via a share offering ahead of being listed with an initial market cap of £83.8m.
The move came after strong growth for the firm which focuses on delivering meals to “Baby Boomer-plus” consumers.
“With an effective vaccine rollout underway, momentum and confidence in the UK IPO market should continue to build, but future growth may vary depending on the sector,” added Timmins.
EY said confidence in the UK’s IPO markets as an exit route had been reinforced by significant private equity (PE) activity in the quarter. Three PE-backed IPOs - the same number as in the whole of 2020 - were responsible for 41 per cent of funds raised in Q1 2021, with the biggest, Dr Martens, raising £1.5bn.
The data also showed that the UK has maintained both its position as the leading listing location in Europe for fund raising and, on a global basis, remains in third place behind the US and China for funds raised via IPO.
The figure rose from 76 in 2019 to 89 in 2020 – including 19 acquisitions backed by private equity funds, said the report by global law firm Mayer Brown.
Mayer Brown says the recent sales of the restructuring arms of Big Four accountancy firms KPMG and Deloitte have highlighted the increased interest in professional services firms from private equity funds. KPMG sold its restructuring practice to H.I.G. Europe, while Deloitte sold its restructuring practice to professional services platform group Teneo, owned by CVC Capital Partners.
It said both sales were likely to have been influenced by the Big Four’s desire to divest business units as part of reforms of the audit profession.