ConvaTec’s $1.8bn float bright spot in a subdued autumn market
Linklaters and Freshfields Bruckhaus Deringer are advising on medical products company ConvaTec’s anticipated $1.8bn initial public offering (IPO).
At press time, the estimated $1.8bn deal would make it the largest IPO on the London Stock Exchange (LSE) since the Brexit vote on 23 June. It is currently owned by investors Nordic Capital and Avista Capital Partners.
Freshfields corporate partner Chris Mort (pictured) is leading for ConvaTec, which announced its intention to float on the LSE by early November. Mort has previously advised on the IPOs of more than 30 FTSE companies, including Hastings Insurance Services, Merlin Entertainments and Saga.
Linklaters is acting for the banks on the deal, with corporate partners James Wootton, Dan Schuster-Woldan and Mike Bienenfeld leading the team. Bank of America Merrill Lynch, Goldman Sachs and UBS Investment Bank are the global co-ordinators on the IPO, while Credit Suisse, Deutsche Bank, Morgan Stanley and JP Morgan Cazenove are joint bookrunners.
While this is the largest float since June, a number of deals have been postponed as currency volatility knocks investor confidence. TI Fluid Systems, the UK arm of an automotive company owned by Bain Capital, saw its €600m IPO dropped in October. Another major deal to fall through was a £190m float of PureGym. That IPO was put on ice in the wake of the Brexit vote and finally abandoned last month. Clifford Chance had been advising the fitness company on the deal as well as US private equity firm CCMP Capital Advisors, while Freshfields was acting for the underwriters.
However, there is still potential to see some major corporates list in the fourth quarter of this year. Herbert Smith Freehills is advising Telefónica on the planned IPO of its UK business O2, with the Spanish telecoms giant aiming to sell off between 25% and 49% of the business. An estimated £500m IPO for financial software company Misys is still underway, with Freshfields leading for the company on the float.
One City partner commented: ‘People expected a remain vote and the deals to start with a bang in the autumn. There was still a decent pipeline of deals, but you never quite know whether the market is open and whether they will go through. PureGym was put on pause and TI Fluid seems to be off. We do need a couple more to come through to keep the market confident.’
Looking ahead, corporate partners told Legal Business the real impact could come if article 50 is triggered early next year in the build up to the busy IPO season in March and April.
matthew.field@legalease.co.uk