News Column

Discount Retailer MandM Direct To IPO As Biofrontera Shares Rise

June 3, 2014

Rowena Harris-Doughty



LONDON (Alliance News) - Online discount retailer MandM Direct Ltd Tuesday became the latest retailer to throw its hat into the ring for an initial public offering of shares in London, amid signs that investors have started to get IPO fatigue.


Meanwhile, European pharmaceutical company Biofrontera AG saw its shares rise on its first day of dealings on London's AIM market.


MandM, an online retailer which offers well-known brands at discounts of up to 75% in the UK and Europe, is set to list on AIM over the next few weeks and will raise GBP12.5 million for the company to repay its existing outstanding senior debt and accelerate growth to develop its UK business and expand its European business.


MandM works with brand owners to clear large excess batches of end-of-line stock.


The company, founded in 1987 by Mark Ellis and Martin Churchward to sell clearance sports products, will have a market capitalisation of between GBP140 million and GBP170 million, according to a person familiar with the situation.


The IPO also will give existing shareholders a chance to sell down their shareholding, the company said.


Private equity group TA Associates currently owns a majority shareholding in the company, acquired in 2007, while management also has a small stake.


"This listing represents an exciting stage in our development and will give us the opportunity to further accelerate our growth," said Chief Executive Officer Jonathon Brown.


Brown was previously online director for the department store chain of The John Lewis Partnership.


Alan White, a former CEO of direct home-shopping company N Brown Group PLC, will be chairman after the IPO, MandM said.


The company currently has local websites in the UK, Ireland, Germany, France, Austria, the Netherlands and Poland, and has an active customer base of 1.3 million, but said it plans to launch dedicated country websites in further markets in the coming 18 to 24 months.


In the financial year ended February 23, MandM Direct recorded revenues of GBP118.9 million, up 9% on the year earlier, with earnings before interest, taxes, depreciation and amortisation of GBP10.5 million, a 21% increase on the prior year.


MandM Direct's plans to float come at a time when the London market has been flooded with IPO's, particularly from retailers. These include recent listings from online retailers Boohoo.com PLC and AO World PLC earlier this year, as well as the announcement of IPO plans from clothing retailer Blue Inc.


Earlier in the year, retail names such as Just Eat PLC, Pets at Home Group PLC and Poundland Group PLC completed well-received flotations.


However, in recent weeks, retailers including Card Factory PLC and AO World have seen their share price dip below the level at which they were offered, while Fat Face Group Ltd postponed a proposed IPO for later this year, citing weak conditions in the UK equity market as the main reason for backing out.


According to one person familiar with the IPO market, the pipeline for the second half of 2014 is noticeably quieter than the first, amidst tightening investor attitude. Some companies currently planning to float in the second quarter may even push their IPOs into the second half as a result. With the retail sector highly represented in the wave of IPOs so far this year, there could be a shift to companies in sectors that haven't been as prevalent, the person said.


Another person familiar with the market said that fund managers are increasingly scrutinising intention-to-float announcements.


Canaccord Genuity Ltd is acting as MandM Direct's advisor and joint bookrunner for the IPO, and Investec Bank is acting a joint bookrunner.


Separately, Biofrontera, which specialises in the development of dermatological drugs, medical devices and medical cosmetics for the treatment of skin diseases, set priced its IPO at EUR3.15 per share, giving it a market capitalisation of EUR69.9 million, with 22.2 million total shares.


Biofrontera shares were trading at EUR3.25 Tuesday morning.


The company said its stock market flotation will provide a platform for the company to build on its institutional and international investor base in line with its growth potential over the coming years.







For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: Alliance News


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters