The IPOX® Update 9/14/24

U.S.

KinderCare Learning Companies Revives IPO Plans After Three-Year Delay

KinderCare Learning Companies, a leading U.S. early childhood education provider, is reviving its IPO plans after a three-year delay. The IPO is one of the first major initiatives by new CEO Paul Thompson, who took over in June 2024. KinderCare operates over 1,500 centers for children aged six weeks to 12 years across the U.S. Partners Group, which acquired KinderCare in 2015, will remain the controlling shareholder post-IPO. The company reported a 6% revenue increase to $1.34 billion in the first half of 2024, with profits of $26.8 million. The IPO is underwritten by a 12-bank consortium led by Goldman Sachs, Morgan Stanley, Barclays, and J.P. Morgan. KinderCare plans to list on the New York Stock Exchange under the symbol "KLC". (Source)

Titan Cement International Plans IPO of U.S. Unit Titan America in Early 2025

Titan Cement International plans to IPO its U.S. unit, Titan America, in early 2025. Citigroup and Goldman Sachs have been hired to manage the listing in New York. The IPO aims to raise at least $500 million by selling a minority stake. Titan America's valuation could exceed $2 billion, with $1.6 billion in sales in 2023. Titan America contributed nearly 60% of Titan Cement’s total sales last year. Titan Cement shares have risen 80% in the past year, reaching a market cap of $2.8 billion. European firms like Holcim are also seeking U.S. listings for their North American units. (Source)

U.S. IPO Market Expected to See 30-50 More Deals in 2024

The U.S. IPO market is expected to see 30-50 more deals in 2024, potentially raising about $10 billion. However, market volatility and the upcoming U.S. election make a full IPO rebound unlikely before 2025. Companies are exercising caution, fearing poor IPO performance due to investor reluctance and tech stock volatility. Currently, 119 IPOs are actively maintaining filings, with Solera and Grupo Aeroméxico among the top candidates. Major fall IPO candidates include StubHub, Cerebras, and Specialty Building Products. Solera, a Texas-based auto software provider, could raise up to $1.5 billion in its IPO. Tech IPOs in 2024 remain below average, despite the overall market recovering from 2023's low levels. (Source)

Europe

Springer Nature Plans IPO by Late 2024

Springer Nature, a German academic research publisher, announced plans to go public by late 2024. Its private equity owner, BC Partners, aims to exit after over a decade of ownership. The company had previously delayed its IPO in 2020, when it sought to raise $1.1 billion amid the COVID-19 pandemic. Last year, Springer Nature reported a 5% growth in adjusted revenue and reduced its debt to 2.7 times EBITDA. The IPO could potentially value the company at $10 billion, based on sector average valuation multiples. While IPO markets are currently weak, Springer Nature may target a smaller raise of $550 million. Post-IPO, the company plans an annual dividend payout of 50% of its adjusted net income. (Source)

Germany's Pentixapharm to Launch IPO in Q4 2024

Pentixapharm, a subsidiary of medical tech firm Eckert & Ziegler, plans to launch an IPO in Q4 2024. Pentixapharm specializes in radiopharmaceuticals, with its leading blood cancer treatment currently in Phase 3 trials. The IPO aims to raise funds for both short- and long-term financing, targeting institutional and retail investors. Founded in 2019, the company employs 80 people and was acquired by Eckert & Ziegler in 2021. The decision to spin off Pentixapharm allows Eckert & Ziegler to focus on its core isotope production and sales business. The last biotech IPO in Germany was by Brain Biotech in 2016, as most companies have chosen to list on Nasdaq in recent years. (Source)

Dutch Grid Operator Tennet Seeks IPO for German Unit

Tennet, a Dutch grid operator, is moving forward with plans to privatize its German operations after failing to sell the unit to the German government. Tennet has invited investment banks to pitch for roles in a potential IPO of its German grid business. The company previously valued the German unit at around €22 billion ($24 billion), including debt, in earlier talks with the government. Tennet is also in discussions with pension funds and infrastructure investors from Canada and Australia about selling a stake in the unit. A key challenge for any deal will be the significant investment required to upgrade the grid for renewable energy transmission in Germany. The Dutch government may announce its plans for the German unit in the coming days. (Source)

Asia-Pacific

Midea Group Raises $3.98 Billion in Hong Kong IPO

Midea Group, a Chinese home appliance giant, raised $3.98 billion in its Hong Kong IPO. This is the largest IPO in Hong Kong in over four years, drawing significant global investor attention. Midea offered 492 million H-shares at a 21%-25% discount to its A-share price, attracting strong demand. Eighteen cornerstone investors, including Cosco Shipping and UBS Asset Management, committed $1.26 billion. The offering was oversubscribed on the first day, allowing Midea to price at the top of the range. The IPO pricing represented a 19.8% discount to its A-shares, still wider than rival Haier’s 14.7% discount. Midea's success is expected to encourage more A-share companies to pursue Hong Kong listings. (Source)

Chinese AI Chipmakers Enflame Technology and Biren Intelligent Technology Plan IPOs

Chinese AI chipmakers Enflame Technology and Biren Intelligent Technology are planning IPOs in Shanghai or Hong Kong, aiming for late 2024 or early 2025 listings. Enflame seeks to raise $280 million via the STAR board, which supports fast-growing, loss-making companies. Both firms are developing AI chips to challenge Nvidia, benefiting from China’s push to reduce reliance on US technology amidst growing geopolitical tensions. Enflame is valued at $2.47 billion, with Tencent holding over a 20% stake, and has raised $340 million in pre-IPO funding this year. Biren, backed by IDG Capital and Ping An Insurance, is developing GPUs for AI and cloud computing. If the Shanghai IPO process slows, Biren may consider a Hong Kong listing as an alternative. (Source)

MENA

Oman's State-Run OQ Plans IPO for Subsidiary OQ Exploration and Production

Oman's state-run energy company OQ plans to list 25% of its subsidiary, OQ Exploration and Production (OQEP), on the Muscat Stock Exchange. The IPO is expected in October 2024, pending approval from Oman's Financial Services Authority. OQEP, Oman’s largest oil and gas exploration company, operates 14 upstream assets, including onshore and offshore projects. OQ will retain at least 75% ownership in OQEP following the offering. The company plans to pay a dividend of $150 million for Q3 2024, with further dividends in Q4 and beyond. OQEP expects to pay annual base dividends of about $600 million, plus 90% of free cash flow as performance-linked dividends in 2025-2026. OQEP reported a 2023 revenue of 1.09 billion Omani riyals ($2.83 billion), with a slight decline in profit to 611 million riyals. (Source)

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