Shares of private equity firm CVC surge after its Amsterdam launch

 Stock Market News

On the first day of trading in Amsterdam, shares of the private equity firm CVC Capital Partners saw a 25% increase, positioning it as one of the biggest initial public offerings in Europe this year.

After being priced earlier on Friday at 14 euros, the midpoint of the disclosed range, which valued one of Europe's top buyout firms at roughly 14 billion euros, CVC shares opened at 17.34 euros ($18.61).

They reached a high of 17.55 euros per share before closing at 17.13 euros.

The business estimated that, depending on whether over-allotment options were exercised, the deal would generate between two and three billion euros. According to CVC, the offer was raised to meet the strong demand from institutional investors worldwide after being oversubscribed many times.

Rob Lucas, the CEO, said in a statement, "We are extremely happy to have received great support for our IPO from both our new and existing shareholders." "This is testament to the huge amount of hard work that has gone into building CVC over the last 40 years."

A portion of the company's founders stand to gain millions from the IPO, which will also enable CVC to expand its holdings beyond the 186 billion euros already under management.

CVC had been thinking about going public for a while, but they had given up on a prior effort because of the unstable market.

A number of European businesses have gone public lately, capitalizing on rising stock values and heightened investor confidence.

Performance on new issues has been uneven, though. Galderma's stock shot up last month when it went public, while Douglas, the CVC-backed cosmetics store, did poorly, closing below its issue price.

The IPO could provide significant benefits to Donald Mackenzie and Steve Koltes, the founders of CVC. Reuters estimates based on the offering prospectus indicate that Mackenzie is expected to cash in around 121.7 million euros through the sale of existing shares, assuming the issue price and not activating the over allotment option. Koltes is said to have raised 27.7 million euros.

Morgan Stanley, JP Morgan, and Goldman Sachs were the three investment banks in charge of the IPO.

CVC is the most recent European buyout group to go public, joining EQT (ST:EQTAB) and Bridgepoint as previous examples.

After becoming public five years ago, the share price of Stockholm-listed EQT increased four times, and the amount of assets under management increased as well.

One dollar is equal to 0.9316 euros.