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Shares in European private equity group CVC Capital Partners began trading at more than €17 on Friday, above the €14 offer price, underscoring strong investor appetite for the long-awaited initial public offering.
The €2bn offering was oversubscribed multiple times, CVC said in a statement. The total offering may increase to €2.3bn if an overallotment option is exercised in full.
CVC raised €250mn in fresh capital by issuing 17.8mn new shares, while existing shareholders in the business including co-founder Donald Mackenzie and the sovereign wealth funds GIC, Hong Kong Monetary Authority and Kuwait Investment Authority are selling larger stakes in the business than initially anticipated to increase the offering size.
Current CVC employees including co-founder Rolly Van Rappard, who chairs the listed group, and chief executive Rob Lucas are not selling any shares.
“We are very pleased to have received great support for our IPO from both our new and existing shareholders, and we welcome their confidence in our future,” Lucas said in a statement. “The strength of demand has meant that we have been able to significantly increase the offer size by more than €400mn to €2bn, providing additional liquidity for the market.”
The company decided to price the IPO conservatively as part of a strategy to ensure the share price performed well when it began trading, a person familiar with the matter said.
CVC, which manages €186bn across investment strategies ranging from buyout to credit, has endured a years-long wait to go public, twice having to postpone listing in the wake of market turbulence.
Its decision to press ahead with the listing now highlights the growing momentum across European stock markets for new offerings. Companies including dermatology business Galderma and software group Planisware have both successfully gone public in recent weeks.
CVC is following a small group of its buyout peers in becoming a publicly traded company. Wall Street groups including Blackstone, KKR and Apollo all listed more than a decade ago, while European competitors such as EQT and Bridgepoint have gone public recently.
Founded more than three decades ago by a group of former Citibank executives, CVC has grown into one of Europe’s largest and most respected private equity firms.
The group owns stakes in companies including Lipton Teas and Infusions and watchmaker Breitling. CVC has also been a large investor in sports and has invested in Spanish football league La Liga and the Six Nations rugby union tournament.
Last year, CVC raised €26.5bn for the largest buyout fund on record and also agreed a €1bn deal to buy infrastructure firm DIF Capital Partners.
The proceeds raised from the offering will be used to help CVC grow, including through acquisitions of other managers, as the $8tn private equity industry undergoes a period of consolidation. Going public will also boost CVC’s visibility in the competition for investor cash and talent, the Financial Times previously reported.
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