The IPOX® Update 12/20/23

Saudi Airline Flynas Plans 2024 IPO with Major Banks

Saudi Arabian airline Flynas is preparing for a 2024 IPO in Riyadh, engaging Goldman Sachs and Morgan Stanley for the process. Partly owned by Billionaire Prince Alwaleed Bin Talal, Flynas has been operational since 2007 and had previously considered IPOs in 2008 and 2018. The IPO aligns with Saudi Arabia's ambitious $800 billion initiative to diversify its economy beyond oil. The nation is targeting 70 million international visitors by 2030, bolstering its aviation sector. This move follows the successful $678 million IPO of SAL Saudi Logistics Services, whose shares surged 43%. Discussions about Saudi sovereign wealth fund acquiring a stake in Flynas are also underway. (Source)

Saudi Arabia: The Emerging Investment Hotspot

Mirroring China's growth trajectory in the 2000s, Saudi Arabia is fast becoming a new focal point for investors. Since its inclusion in the MSCI Emerging Markets index in 2019, the country has seen heightened foreign interest in its stocks. The Tadawul index, reflecting this interest, rallied by 11% in 2023. The market's liquidity has been enhanced by the diversity of sectors represented, often trading at a premium compared to the MSCI benchmark. Saudi Arabia's MSCI index weighting has grown to 4.1%, attracting $11.5 billion from IPOs since 2022. The potential increase in foreign ownership limits could lead to an additional $7.3 billion in passive investor inflows. Despite these positives, geopolitical risks continue to pose challenges for investors in Saudi Arabia's market. The wider region has seen an upswing in new listings, as reflected by our IPOX® MENA Index. (Source)

Lebara Evaluates Sale or IPO Amid Growing Customer Base

London-based telecommunications group Lebara is considering a sale or IPO following significant customer growth. Owned by private equity firms Alchemy and Triton since 2019, Lebara has shifted its focus to younger and cost-conscious consumers. This strategic shift has led to a customer base increase to 4 million since 2020, with the EBITDA forecast for the next year expected to double. CEO Stephen Shurrock is collaborating with Guggenheim to explore these strategic options. Lebara, an MVNO, leverages networks like Vodafone's in the UK to deliver its services. (Source)

Europe's Market Regulators Seek to Boost Region's IPO Appeal

The European Securities and Markets Authority (ESMA), led by Chair Verena Ross, is actively working to enhance the appeal of Europe for stock listings. Recognizing the fragmentation of European markets as a significant challenge, ESMA's efforts are aimed at supporting EU companies and investors. Despite 2023 marking a low in global IPO activity, with a notable drop in Europe, ongoing initiatives include a capital markets union and a consolidated data feed. Ross expressed frustration over the slow pace of market integration and accessibility improvements, underscoring the need for further efforts to attract investors and create vibrant capital markets in the region. (Source)

ServiceTitan in IPO Preparations for 2024

Software provider ServiceTitan Inc., specializing in business management for the HVAC sector, is resuming its IPO preparations for 2024, partnering with Goldman Sachs and Morgan Stanley. The company, founded in 2012, had initially planned a public listing in 2022 but postponed due to unfavorable market conditions. Valued at $9.5 billion in 2021, ServiceTitan's forthcoming IPO size and valuation are yet to be determined. Its flotation plans are in line with other companies like Reddit and Rubrik, targeting the first half of 2024. Despite the recent mixed performance of companies like Arm Holdings and Instacart in a brief market revival, ServiceTitan is moving ahead, bolstered by increased demand for house renovation and a confidential IPO filing in early 2022. Investors in ServiceTitan include notable names like Battery Ventures, Bessemer Venture Partners, and Sequoia Capital. (Source)

Schott Pharma's Stock Rises Post SDAX Inclusion and Strong Results

The stock of Schott Pharma, part of the IPOX® Indexes, has seen a significant rise, reaching near record highs of around 35 Euros post-IPO in early October. The company's preliminary figures for 2022/23 indicate a 9% revenue increase to 899 million Euros ($965.4 million), with EBITDA also rising by 9% to 239 million Euros ($256.7 million), hitting the upper range of forecasts. This growth is attributed to expanded production capabilities, including new polymer syringe lines. Schott Pharma's full financial report is scheduled for release on January 26, 2024, with CFO Almuth Steinkühler expressing a positive outlook for the upcoming year and the company's mid-term goals. (Source)

Fractyl Health Files for $100 Million IPO for Diabetes, Obesity Treatments

Fractyl Health has filed for a $100 million U.S. IPO to advance its treatments for Type 2 Diabetes and obesity. The company's Revita DMR System, already approved in Europe, is part of a global Type 2 diabetes market projected to reach $61.6 billion by 2030. Fractyl's gene therapy, Rejuva, is showing promising results in preclinical trials, potentially competing with Novo Nordisk's Wegovy. In studies, Rejuva reduced body fat by 25% in mice, outperforming daily doses of semaglutide. The IPO proceeds are planned for a 1,000-person study of Revita and the preclinical development of Rejuva. Fractyl, which last raised $100 million in a series F round in June 2021, has received a breakthrough device tag from the FDA for Revita. (Source)