October 5, 2018 / 12:32 PM / 10 months ago

IPO shelved as Germany's Exyte fails to excite

LONDON/FRANKFURT (Reuters) - German chip factory builder Exyte has shelved plans to float on the Frankfurt stock exchange this month after receiving muted feedback from investors, becoming the latest aspiring public company to face listing difficulties.

People close to the Exyte plans had said that stock worth up to 1 billion euros (878.33 million pounds) was expected to be offered in a deal that could have valued the company, formerly known as M+W Group, at as much as 3 billion euros.

“Potential Exyte investors balked at the valuation of the company, whose projected earnings growth was seen as ambitious,” a source close to prospective investors said, adding that given its size Excyte was not considered a ‘must-have’.

Exyte had been among a number of companies vying for investors’ attention, including Knorr Bremse and Westwing in Germany and SIG Combibloc in Switzerland.

Sources familiar with the matter had said that the Exyte was considering delaying the IPO because of lukewarm investor interest and CEO Wolfgang Buechele said on Friday that the company was postponing the listing because market conditions were not considered ideal.

“We are sticking to our plans but have no time pressure and will wait for the right market conditions,” he said in an emailed statement.

Germany, Europe’s largest economy, has registered its strongest year of initial public offerings (IPOs) since 2000, but it appears that Exyte was a harder sell.

“In the early meetings it looked like some investors were struggling to value the business,” a banker familiar with the deal said on condition of anonymity.

“It’s quite an interesting and successful company, just not one with obvious benchmarks for public investors to price off.”

An equity capital markets banker, meanwhile, said that a slightly more volatile market of late had served to “separate the wheat from the chaff”.

“Market leading companies with strong margins, stable long-term business models and decent size will be able to list in a more challenging environment, while others may not,” he said.


British luxury carmaker Aston Martin highlighted the difficulties for IPO candidates, having received mixed feedback from investors this month. Despite cutting the upper end of its IPO price range, the shares have fallen since they started trading.

Likewise, British peer-to-peer lending platform Funding Circle also slid on its market debut.

By contrast, online furniture retailer Westwing is expected to price its IPO in the upper half of its indicative price range, one of the bookrunners said on Friday.

Exyte’s owner, Austrian entrepreneur Georg Stumpf, had planned to offer shares worth about 25-30 percent of the company in the listing but there had been no plans to sell new shares.

The company builds sites for the semiconductor industry, including cleanrooms where dust and particle-free air are crucial for silicon wafer production. Its customers include Infineon, ASML and Micron.

Founded in 1912 as a specialist for vacuuming sawdust in wood processing, the company expanded into building labs and production sites. It now serves customers in the electronics, chemicals, pharmaceuticals and energy industries, as well as operators of data centres.

(This refiled version of the story restores dropped word in lead).

Editing by Kirsten Donovan and David Goodman

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