Smaller companies choose IPOs to fund growth

Value of IPO deals on London’s junior market surges by 134 per cent year-on-year. Listings on London Stock Exchange’s main market reach eight-year high

Nottingham, UK, 02 MARCH 2015 – The volume and value of Initial Public Offerings (IPOs) on London’s junior market increased last year as SMEs sought funding for growth, according to data from global information services company Experian.

There were 75 IPO transactions on London Stock Exchange’s (LSE) AIM last year worth a total of £2.5 billion, an increase in value of 134 per cent on 2013.

IPOs on AIM provide an opportunity for SMEs to seek growth funding, while the increased activity will also encourage business owners looking for an alternative to a sale.

Wholesale and Retail was the most active sector, contributing 41 per cent to the overall value of transactions, followed by Manufacturing (34 per cent) and the Information and Communication sector (24 per cent). Finance and Insurance services was the third most active sector on London’s junior market in 2013, contributing 30 per cent of the value, but only ranked in fifth place last year, accounting for 12 per cent of the total transaction value.

The volume and value of IPOs on the LSE’s main market also increased last year. The number of IPOs went up by 43 per cent from 40 to 57, while the total value rose to £12 billion, up 12 per cent on the £10.6 billion recorded in 2013. This was the highest level of volume and value recorded on London’s main market since 2007. Large IPOs worth more than £100 million dominated the main market, and private equity investors were involved in 20 of the large transactions, accounting for £7 billion of the total.

Financial and Insurance services was the most active sector on the London Stock Exchange last year, raising £5.5 billion through 39 deals, followed by the Wholesale and Retail sector, which completed 32 transactions worth £5.5 billion combined, while the Information and Communication sector completed 27 transactions worth £3.3 billion.

Wendy Driver, Business Development Manager at Experian UK&I, said: “The growing number of IPOs on the AIM suggests smaller businesses are increasingly considering listing as an option to secure the funding they need to take their company to the next level. Business owners may be curious about what their company could be floated for and should look back at IPOs of companies similar in size and sector in previous years to decide whether it’s an option they wish to explore further.”

 Top tips for companies preparing for an IPO:

  • Plan ahead: Making your business available for public investment for the first time should not be taken lightly. The process of listing an IPO typically takes between three and four months, but many companies allocate two years to put plans in place.
  • Organise your finances: A track record of growth, a healthy credit score and a history of settling bills in good time will help impress would-be investors as well as suppliers. Monitor your company’s progress with Experian’s My Business Profile.
  • Outline the future: Demonstrate to investors their money will be soundly placed with your business by outlining a pathway to growth. Research new customers and markets which could be reached with the injection of capital an IPO provides. Experian Business Express puts 5.1 million records at your fingertips to find potential customers to grow the company.
  • Boardroom balance: New members of the board are typically required to fulfil the corporate governance requirements which come with becoming a public company. Conduct thorough background checks on potential board members and view their history as a director before appointing them.
  • Run the business: Preparing for an IPO will be hugely time consuming, but remember day-to-day business activities continue while you are planning for a flotation. Consider adding to the management team to adapt to the additional workload.

Download the ‘IPO Transactions 2014 – European Overview Deal Volume and Value’ report here. It includes additional information on the accountants, brokers, legal and financial companies who advised on the IPOs on the LSE.



Notes to the editor:

Data has been compiled based on any announced or completed Initial Public Offering, which was announced between the dates of January 1st 2014 and December 31st, 2014 on European Stock Exchanges.

Experian Corpfin covers all IPO transactions with any deal value, with values converted from local currencies to GB£ using the exchange rates from 1st of the month that the transaction was announced. Deals with undisclosed consideration are also included.

AIM is the London Stock Exchange’s international market for smaller, growing companies. Both early stage and established companies use join AIM to access growth capital. The main market is for larger businesses.

Follow us on Twitter @ExperianMIQ for our latest news, views and insight.


Ade O’Connor

PR Manager

Credit Services

T: 44 (0) 115 992 2645 | M: 44 (0) 7583 085796

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About Experian

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