Seven trading companies join the official list in highest first quarter activity since 2000

The UK Initial Public Offering (IPO) market has seen its highest first-quarter activity since 2000, with seven trading companies joining the Official List to raise combined funds of £2.79bn, during the first quarter of 2006.

In 2000, eight trading companies raised £524m during Q1, while last year only two companies applied during the same period.

David Simpson, corporate finance partner at KPMG’s Capital Markets Group, said: “This is great news for a market which has seen a dearth of large company IPOs over recent years. It demonstrates that appetite remains high for quality businesses with a sound track record.”

Meanwhile, the UK’s Alternative Investment Market experienced an increase in foreign company IPOs during Q1, with 17 overseas entrants, compared with 14 during Q1 2005.

Tony Fry, transactions services partner at KPMG’s Capital Markets Group, said: “Foreign firms are attracted to London by the high quality, cost-effective regulatory environment. The trend for overseas entrants is also driven by the lack of an equivalent junior market elsewhere.”

KPMG told CRN it predicted a buoyant year for IPOs for the remainder of 2006.

However, Eddie Pacey, director of credit at distributor Bell Microproducts, did not think there would be a massive rise in IPOs in the channel.

“There’s certainly a cause for lots more investment from third-party investors or private equity investors, but not everyone suits IPOs,” he said. “Those resellers that have merged with another company might benefit from an IPO, but your average reseller wouldn’t.”

Pierre Lams, co-founder of reseller Handheld PCs, said: “We set up Handheld in 2002 and although it is a bit too early for us to float, it is definitely a serious consideration in order to fund further growth.”