More IPOs in the works for Zurich bourse

Investment specialists say there could by up to eight IPOs at the Swiss Stock Exchange this year Keystone

Within the next week, there should be some excitement at the Swiss Stock Exchange (SWX) in Zurich again as two initial public offerings (IPOs) of high-tech companies come to the market.

If these two firms float successfully, it will bring the number of IPOs at the SWX to three so far for the year.

Last Wednesday, biotechnology start-up company Arpida released the details of its floatation. The announcement came two days after Geneva-based Advanced Digital Broadcast (ADB), a developer of digital TV set-top boxes and software, announced its IPO, slated for April 29.

The first off the blocks in 2005 was Dottikon ES, a Swiss-based fine chemical company specialising in hazardous, safety-critical chemical reactions, which raised SFr236.7 million ($199 million) in March.

Arpida is a venture-backed firm active drug development against bacterial infections, which hopes to raise about SFr100 million. The capital will be used to fund clinical trials.

ADB, which is majority owned by its founders and employees, plans to float about a third of its shares to raise SFr100 million. The money will be used for working capital, some “small” acquisitions, and increasing the number of employees to cope with market demand.

Foreign interest

The performance of the IPOs will be watched closely not only locally, but also by foreign firms. At least one UK-based biopharmaceutical company is considering a flotation of its shares on SWX due to the market’s growing reputation for life science stocks.

It is too soon to say if this marks the beginning of recovery in demand for tech stocks. Last year, SWX supported four IPOs, raising about SFr633 million in total.

But investment bankers in Zurich have been quoted in the Swiss press as expecting at least six to eight IPOs this year by firms from a broad range of industries including banking, logistics, real estate, but also software and biotechnology.

A SWX spokesperson declined to comment on whether the exchange was expecting a greater number of floatation this year than last, explaining that it can be as little as four weeks before an IPO is to take place that it receives notification.

International player

ADB was founded in 1995 and has grown to $176 million sales in 2004. The sales growth has followed the trajectory of emerging digital TV services in Asia and Europe. It employs around 440 people.

The company is headed by Polish-born Andrew Rybicki who said that ADB’s location in Geneva gives it an “ideal” base for its business.

Two suppliers are located nearby, Nagravision Kudelski, which supplies encryption and conditional access technology, and STMicroelectronics, which supplies semiconductors for its set-top boxes.

Rybicki also mentioned the importance of being near the standards setting organizations, such as the Digital Video Broadcasting Project (DVB), an industry-led consortium based in Geneva.

Post IPO, some 30 percent of ADB will be in the hands of outside shareholders, with the remainder of the stock retained by Rybicki, as well as the employees and management of the company.

by Valerie Thompson