The IPOX® Update 7/13/24
U.S.
TWFG Insurance Seeks $176 Million in Nasdaq IPO
TWFG Insurance, a U.S.-based insurance brokerage, is planning to raise up to $176 million in an IPO on the Nasdaq. The company intends to offer 11 million shares at a price range of $14-$16 each. Founded in 2001 by CEO Gordy Bunch III, TWFG would have a market capitalization of $850 million at the top of the range. The company plans to use the proceeds to repay $41 million on its revolving credit facility and fund acquisitions. TWFG generated most of its revenue from its "Agency-in-a-Box" offering for captive and independent agents. In 2023, the company reported revenue of $172.9 million, up 12.4% year-over-year, with an adjusted net income of $25.5 million. TWFG is currently in preliminary talks to acquire 36 retail and wholesale insurance brokers in the United States. The IPO is scheduled for July 17, 2024, and represents a significant step for the company's growth strategy in the competitive insurance brokerage market. (Source)
Smithfield Foods Plans $1 Billion U.S. IPO
Smithfield Foods, a major U.S. pork producer, is planning an IPO in the United States, aiming to raise at least $1 billion this year. The company has enlisted Bank of America and Goldman Sachs to advise on the IPO. Smithfield, a subsidiary of Hong Kong-based WH Group, could still decide against listing. The news of the potential IPO caused WH Group shares to rise up to 3.8% in Hong Kong. WH Group, currently valued at $8.2 billion, reported revenue of $26 billion in 2023. The group acquired Smithfield in 2013 and subsequently listed on the Hong Kong Stock Exchange in 2014. Smithfield, founded in Virginia in 1936, has established itself as a significant player in the pork production industry. The potential IPO could provide Smithfield with additional capital for expansion and allow it to tap into the U.S. investor base. (Source)
Europe
Britain Implements Biggest Listing Rule Changes in Three Decades
Britain is set to implement the most significant changes to its listing rules in 30 years on July 29, 2024. The new "commercial companies" category will replace the existing "standard" and "premium" listing requirements. Under the new rules, companies will no longer need to provide historical financial information or revenue track records for listings. The changes also eliminate shareholder votes on significant related party transactions. Founders and directors will be allowed to have enhanced voting rights indefinitely to retain control post-listing, while pre-IPO institutional investors can have enhanced voting rights for up to 10 years. Additionally, Special Purpose Acquisition Companies (SPACs) will be able to extend their transaction completion period by 12 months, up to three times, with shareholder approval. These changes aim to make the London Stock Exchange more attractive to companies considering going public and to compete with other global financial centers. (Source)
Canal+ Explores Potential London Stock Exchange Listing
Canal+, a broadcaster owned by French media company Vivendi SE, is considering a listing on the London Stock Exchange. The potential listing could take place by the end of the year, although Amsterdam is also being considered as an alternative option. This move is part of Vivendi's broader strategy to split into four listed units, aiming to increase asset value and share price. The news of the potential listing caused Vivendi's shares to surge 6.3%. Canal+ currently boasts 26.4 million subscribers across more than 50 countries and reported first-quarter revenues of €1.5 billion. The company has been expanding internationally, investing in streaming platforms Viaplay and Viu, and proposing to acquire MultiChoice. This potential listing aligns with London's efforts to boost its IPO market, as new rules are being implemented to attract more issuers. (Source)
CK Infrastructure Holdings Considers London Listing
CK Infrastructure Holdings (CKI), owned by Hong Kong billionaire Li Ka-shing, is exploring the possibility of a London listing to access a broader investor base. The proposed listing would not involve fundraising, and no final decision has been made. According to a Bloomberg analyst, a UK listing could enhance CKI's credibility and support its mergers and acquisitions ambitions. The company's interest in a London listing coincides with new UK rules set to take effect on July 29, which will facilitate listings of non-UK incorporated firms. CKI, part of Li Ka-shing's CK Group, finds the UK market highly profitable. Victor Li, CKI's chairman, emphasizes the company's focus on seeking global deals for attractive returns. A London listing may also ease hurdles for overseas M&As by diluting CKI's Hong Kong/China identity. This move reflects CKI's strategy to expand its global presence and capitalize on international investment opportunities. (Source)
Shein Pledges €250 Million Investment in UK and Europe Ahead of Potential IPO
Shein, the fast fashion retailer, has announced plans to invest €250 million ($271 million) in the UK and Europe over the next five years. This move comes as the company prepares for a potential London IPO, while facing criticism for its low-cost, direct-to-consumer business model. The investment includes €50 million for potential R&D and pilot production facilities in Europe or the UK. Shein reported sales of approximately $45 billion in 2023 and was valued at $66 billion in a recent fundraising round. The company aims to increase sourcing from Turkey and integrate more UK and European designers into its incubator program. Additionally, Shein is launching a €200 million "circularity fund" to support textile recycling technologies. The company's expansion plans come as the EU discusses abolishing tax breaks for parcels under €150, which could affect Shein's pricing strategy. This investment demonstrates Shein's commitment to the European market and its efforts to address sustainability concerns ahead of a potential public listing. (Source)
Asia-Pacific
GMM Music Plans IPO Following Tencent Investment
GMM Music, a leading Thai music company, is planning an initial public offering as early as this year or in 2025. The firm recently received a 10% stake investment from Chinese technology giant Tencent, valuing GMM Music at $700 million. GMM Grammy, the parent company, aims to offer up to a 30% stake in GMM Music to repay debt and fund expansion. The strategic investment from Tencent marks a significant milestone for GMM Music. This year, initial share sales in Thailand have totaled $457 million, down 13% from the previous year. According to the Chief Marketing Officer, the timing of GMM Music's IPO will depend on market conditions. The size of the planned IPO has not been disclosed by the company. This potential listing represents an important development in Thailand's music industry and could attract significant investor interest given the company's market position and recent backing from Tencent. (Source)
Mass IPO Retreat in China as Stricter Listing Standards Take Effect
China is experiencing a significant retreat in Initial Public Offerings (IPOs) as stricter listing standards come into force. The China Securities Regulatory Commission (CSRC) has increased the random inspection rate for IPO candidates to 20% from the previous 5%. In 2024, 315 Chinese companies have withdrawn their IPO applications, with over 100 withdrawals occurring in June alone. These withdrawals are attributed to stricter listing standards following the implementation of the National Nine Articles policies. The new main board listing standards require companies to show a net profit of at least CNY100 million (US$13.75 million) in the past year. For companies seeking listing on the Growth Enterprise Market (GEM), a net profit of CNY60 million (US$8.25 million) is required. These stricter standards, which came into effect on April 30, have significantly impacted the number of IPO applications in China. The updated policies reflect China's efforts to improve the quality of listed companies and maintain market stability. (Source)
Dmall Receives CSRC Approval for Hong Kong IPO
Dmall, a leading cloud solutions provider, has received approval from the China Securities Regulatory Commission (CSRC) for its Hong Kong IPO and is set to proceed with the listing. Dmall is recognized as the largest digital retail solutions provider in China and Asia. The company's major shareholders include Tencent (3.3%) and IDG Capital (7.7%). Dmall is backed by Zhang Wenzhong, the founder of Wumei Technology, which is the majority owner of METRO AG's China operations. In 2023, Dmall reported a net loss of Rmb655m (US$90.2m), an improvement from the Rmb840m loss in 2022. UBS, CMB International, and China Merchants Securities are serving as the joint sponsors for the IPO. According to Frost & Sullivan, Dmall holds a 13.3% market share in China and 10.9% in Asia. This IPO represents a significant development in China's digital retail solutions sector and could attract considerable investor attention given Dmall's market position and growth potential. (Source)
Hyundai Motor's Indian Subsidiary Plans $3-3.5 Billion IPO
Hyundai Motor is planning a $3-3.5 billion IPO for its Indian subsidiary, aiming for a $20 billion valuation. This move could inspire other multinational companies to list in India, attracted by the country's resilient markets and strong economic prospects. Lawyers and bankers note that companies like LG Electronics and Italy's Carraro are considering similar IPOs. Benefits for foreign companies listing in India include strong brand recall, lower capital costs, and favorable tax conditions. Indian-listed subsidiaries of foreign parents often trade at higher valuations than their parent companies. Listing in India can unlock value and serve as a funding tool for growth and acquisitions. This trend reflects the growing attractiveness of India's capital markets and could lead to increased foreign investment in the country's stock exchanges. (Source)
Zhou Liu Fu Applies for Hong Kong IPO After Unsuccessful China A-share Attempts
Zhou Liu Fu, a Chinese jeweler, has applied for an IPO on the Hong Kong Stock Exchange after unsuccessful attempts to list on China's A-share market. The company reported a nearly 15% increase in net profit to 660 million yuan ($91.5 million) last year. Zhou Liu Fu, which resembles popular rivals Chow Tai Fook and Luk Fook, relies heavily on franchising, operating 4,383 stores with only 95 self-operated locations. The company's revenue grew from 2.78 billion yuan ($383 million) in 2021 to 5.15 billion yuan ($715 million) in 2023. However, Zhou Liu Fu's heavy reliance on franchising, accounting for over 80% of revenue, poses a potential risk, although online sales are growing. The company has faced trademark disputes and quality control issues, which have affected its reputation. Despite these challenges, Zhou Liu Fu's IPO application represents a significant step for the company and could attract investor interest given its growth trajectory and the size of China's jewelry market. (Source)
MENA
Al-Hokail Academy to Sell 29% Stake in Nomu IPO
Al-Hokail Academy, a specialized medical training company in Saudi Arabia, is set to sell a 29% stake in its initial public offering on the Nomu parallel market. The company will offer 2.03 million shares with a price range set between SAR 118 and SAR 125 per share. This translates to an offer size ranging from $63.88 million to $67.67 million. The Saudi Exchange approved the listing in December 2023, and the Capital Market Authority approved the IPO application on March 11, 2024. The IPO is scheduled to run from July 7 to 21, 2024, with the final price to be set after the book-building process ends on July 10. Emirates NBD Capital Saudi Arabia is serving as the financial advisor, lead manager, and bookrunner for the IPO. This offering represents a significant development in Saudi Arabia's healthcare education sector and could attract considerable investor interest given the growing demand for specialized medical training in the region. (Source)
Disclaimer: News summaries may contain mistakes. The information does not constitute financial advice, endorsement or recommendation and should not be considered as such.
