Luxembourg-headquartered CVC Capital Partners, one of Europe’s biggest private equity firms, on Wednesday decided to postpone its initial public offering on the Amsterdam stock exchange, a person familiar with the decision has confirmed. The firm now is looking for a new opportunity to go public in 2024.
“Market conditions” are described as the reason for cancelling the plans to go public. It is the second time in two years that CVC had to postpone its listing. The first time was in 2022 when the plans were derailed by market turmoil following Russia’s invasion of Ukraine. This time, market uncertainty against a background of rising interest rates and geopolitics appears to be behind the decision for the second postponement.
The FT first reported the decision to cancel the IPO plans on Wednesday. CVC was planning to raise approximately 1 billion euro by about 10 percent its shares to the public via Euronext Amsterdam, according to Reuters. The firm had previously aimed for a valuation exceeding 20 billion dollars in its IPO, which would have surpassed that of any private equity firm to date. CVC was last valued at 16.4 billion dollars in 2021 after agreeing to sell a minority stake to Blue Owl’s Dyal Capital.
Unable to defy gravity
Concerns over weak earnings from peers including EQT and Blackstone, Middle East instability and broader economic fears have delayed the major IPO. The decision followed a Wednesday meeting of the company’s top executives. Investment banks Goldman Sachs and JPMorgan Chase, which are managing the offering, were informed immediately. “You can’t defy gravity,” one insider told the FT, referring to unsupportive market conditions.
For CVC, which oversees some 161 billion euro in assets, this delay represents a setback in its competition with peers like Stockholm-headquartered EQT, which has capitalised on its 2019 IPO on Nasdaq Stockholm to fund growth through acquisitions. CVC Capital Partners in recent years has raised a total of 55.1 billion dollars over eight funding rounds, the most recent one raising 3.5 billion dollars announced on 18 Jan 2023, according to Crunchbase.
CVC in July said it successfully capped its CVC Capital Partners IX Fund, its ninth Europe/America private equity fund, at a record 26 billion euro, marking it as the most substantial buyout fund ever established, with significant backing from both new and existing institutional investors. The fund is structured via legal vehicles in Luxembourg. Initiated in January with an initial goal of 25 billion euro, the 26 billion euro raised surpassed expectations and outstripped Blackstone’s Capital Partners VIII fund, which previously held the record at 26.2 billion dollars.
CVC Capital Partners conducts its business through two separate corporate groups: CVC Capital Partners SICAV-FIS S.A. and its direct and indirect subsidiaries (the “CVC Management and Investment Business”) and CVC Capital Partners Advisory Group Holding Foundation and its direct and indirect subsidiaries and affiliates (the “CVC Advisory Business”).