3 questions to smart minds

IPO — Comeback for German Companies?

For this 3 questions to Falk Müller-Veerse

Photo: Falk Müller-Veerse
7. Decem­ber 2016

IPOs were a rarity in Germany in 2016. On the Euro­pean stock exch­ange floor, on the other hand, things are looking better. Espe­ci­ally the new issues of smal­ler compa­nies, (place­ment volu­mes between 100 and 250 million euros) shine. Even still smal­ler IPOs, which go to market with 20 to 50 million euros, often show a remar­kable development.

For this 3 ques­ti­ons to Mana­ging Part­ner at BRYAN, GARNIER & Co in Munich

1. There have been very few IPOs in Germany in the last 18 months. So when are the IPOs coming back for German companies?

For German compa­nies, IPOs can happen at any time, it’s just that Germany is not an attrac­tive stock market loca­tion for many compa­nies for various reasons. Since the events on the ‘Neuer Markt’, the German capi­tal market has gene­rally prefer­red IPOs of estab­lished compa­nies from the tradi­tio­nal medium-sized indus­tries with an enter­prise value of more than 200 million. Howe­ver, these compa­nies are often family-run SMEs that avoid the publi­city requi­re­ments and public inte­rest gene­ra­ted by an IPO. Howe­ver, this does not mean that smal­ler compa­nies cannot also deli­ver attrac­tive capi­tal market perfor­mance. The best exam­ple of this is B.R.A.I.N. AG, which has been able to almost double its market capi­ta­liza­tion since its stock market debut at the begin­ning of 2016.

Nevert­hel­ess, the stock exch­an­ges in the U.S. offer a more attrac­tive plat­form for fast-growing German tech­no­logy compa­nies than, for exam­ple, Deut­sche Börse due to the larger inves­tor universe. The same applies to Euron­ext with its stock exch­ange loca­ti­ons in Amster­dam, Brussels and espe­ci­ally Paris for compa­nies in the health­care and biotech­no­logy sectors.

2. Why is Paris, for exam­ple, so inte­res­t­ing for an IPO? For which indus­tries is Paris parti­cu­larly suitable?

Paris as a stock exch­ange loca­tion has enjoyed great popu­la­rity in recent years. In the course of the last three years, 65 compa­nies found their way to Euron­ext Paris — in compa­ri­son, during the same period there were only 32 compa­nies in Germany. Almost 40% of the compa­nies that dared to go public in Paris came from the health­care / biotech sector, follo­wed by 14 compa­nies from the IT sector. This is due in parti­cu­lar to the affi­nity of the inves­tor public repre­sen­ted in Paris for small- and mid-cap compa­nies — thanks to the joint Euron­ext stock exch­ange, inves­tors from the Bene­lux count­ries and France, but also from Great Britain, can be addressed.

3. Is London still attrac­tive after Brexit?

For the time being, London is certainly an attrac­tive loca­tion for an IPO, as it is not yet possi­ble to form a final opinion on this, in parti­cu­lar due to the fact that there are still no details on the actual form of the Brexit. Howe­ver, since the Brexit vote at the end of June 2016, 23 compa­nies have ventu­red or announ­ced their inten­tion to join the London Stock Exchange.

For compa­ri­son — until that very vote, there were 37 compa­nies. Accor­din­gly, a slight weak­e­ning is to be expec­ted, although this should conti­nue to be moni­to­red over the course of the next few months. Over­all, it can be assu­med that there will be no impact in the short term. Such effects will only mani­fest them­sel­ves in the medium to long term. Regard­less of the form Brexit takes, London will nevert­hel­ess remain an important finan­cial center within Europe.

About Falk Mueller-Veerse

Falk, Mana­ging Part­ner at BRYAN, GARNIER & Co in Germany, is an expe­ri­en­ced M&A and fund­rai­sing profes­sio­nal with over 20 years expe­ri­ence in the tech­no­logy and inter­net indus­try. He has a global network in the inves­tor and acqui­rer commu­nity and closed successful deals with Disney, RIM, Balder­ton, Swiss­com and Tele­fo­nica, amongst others.
He is the former head of Durlacher’s Mobile indus­try rese­arch and invest­ment prac­tice (Germany/UK/Spain) and Mana­ging Direc­tor of its German office. He foun­ded Mobile Appli­ca­tion Holding to acquire compa­nies in Finland, Switz­er­land and Germany. Falk was board member of a private and public compa­nies in the mobile inter­net and games sector. He has also been on the advi­sory board of Fron­tiers Capi­tal — the wire­less-focu­sed VC backed by Carphone Warehouse, as well as advi­sory board member of the German Sili­con Valley Accelerator.
Falk holds a B.Sc. degree in Tech­no­logy Manage­ment (Mecha­ni­cal Engi­nee­ring) from the Tech­ni­cal Univer­sity of Kaisers­lau­tern, Germany, and an MBA from Cali­for­nia State Univer­sity School of Busi­ness in the US. He has also studied Inter­na­tio­nal Busi­ness Manage­ment at the Helsinki School of Econo­mics and Busi­ness Administration.

About Bryan, Garnier & Co 

Bryan, Garnier & Co, foun­ded in 1996, is an inde­pen­dent, full-service Euro­pean invest­ment bank focu­sed on growth compa­nies. The range of services includes equity analy­sis, equity sales and trading, private and public capi­tal raising, and M&A services for growth compa­nies and their inves­tors. The focus is on important growth sectors of the economy such as tech­no­logy, media, tele­com­mu­ni­ca­ti­ons, health­care, smart indus­tries, specialty retail and busi­ness services. Bryan, Garnier & Co Ltd is a regis­tered broker and licen­sed with the FCA in Europe and FINRA in the US. Bryan, Garnier & Co is head­quar­te­red in London, with addi­tio­nal offices in Paris, Munich, Geneva and New York. The company is a member of the London Stock Exch­ange and Euronext.

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