London retakes top tech IPO spot

UK most fertile ground for European IT listings

Promethean was the largest tech IPO last quarter

London may be returning to its role as top European city for technology IPOs, if the latest PricewaterhouseCoopers assessment is any guide.

There were seven technology IPOs on European exchanges in the last quarter with an offering value of €667m. Some €353m of that was raised in London.

Andy Morgan, partner at PricewaterhouseCoopers, said the signs were encouraging, with London’s results helping Europe as a whole outperform the US exchanges by both number and value of IPOs, despite continued fragility in the markets.

“The IPO appetite for quality tech companies may be returning,” Morgan said. “We expect the noise around tech listings to crescendo -- but the equity story, pricing and structure need to be right for these deals to come to fruition.”

Last year saw eight technology IPOs on the Continent but none in London. This year, by contrast, the first three months saw three listed on AiM and one on the London Stock Exchange.

London hosted 26 of Europe’s 33 tech flotations back in 2006, but saw its share dwindle to nothing by 2009. Once in first place, it had dropped back to third after NYSE Euronext and the Warsaw Stock Exchange.

Morgan said that this year’s Q1 vintage was an interesting mix of partial sell-downs of private equity, private companies going public, and overseas listings. However, he warned that most companies wanting an exit route or more capital would prefer a trade or private equity approach.

“The portfolio of Q1 tech IPOs gives significant signs of encouragement, and is currently showing a mean 18 per cent uplift on their IPO price,” said Morgan.

“However, investor sentiment remains fragile and the quality of the equity story and realistic pricing will continue to be key if the momentum is to be maintained through 2010.”

Education product vendor Promethean was the largest tech IPO in Q1, listing on the main market. The other successful IPOs included digital security and surveillance platform provider Digital Barriers, primary care software developer EMIS, and datacentre operator CSF.