Verisure Jumps in Debut for Europe’s Biggest IPO Since 2022
(Bloomberg) — Security services group Verisure Plc’s shares rallied in its first day of trading, after the initial public offering raised about €3.2 billion ($3.72 billion) in the largest European debut in three years.
Shares in the firm closed at €16 apiece in Stockholm on Wednesday, 21% above the offering price of €13.25 each. Verisure is the largest IPO in Sweden since 2000, cementing the Nordic country as the top European exchange for IPO fundraising so far this year.
The strong debut offered a positive signal for other big companies weighing listings, as Europe’s IPO market looks to rebuild momentum after years of muted volumes.
“A strong opening shows that the Swedish IPO window is wide open,” said Joakim Bornold, chairman of savings platform Levler. “If Verisure shares continue to trade at these levels, more companies will press the start button for listing.”
More than 500 institutional investors put in orders for the offering, with about one-third of them receiving no shares, people familiar with the matter said.
They sought double-digit times the amount of stock available to be allocated to them, which excluded a portion of the deal allocated to cornerstone investors and existing shareholders, said the people, who asked not to be identified discussing private information. Representatives for Verisure and private equity-backer Hellman & Friedman declined to comment.
The IPO, which priced near the top of the marketed range, valued Verisure at €13.7 billion, the company said in a Wednesday statement. Cornerstone investors, including Alecta and GIC Private Ltd., bought about €1.4 billion worth of shares in the deal, according to the statement.
To Verisure’s Chief Executive Officer Austin Lally, the listing is about longer-term performance rather than a first-day surge in share price.
“It’s not about today, it’s about how the company is trading throughout the rest of the year and then how the company is trading next year and the years beyond,” Lally told Bloomberg TV earlier on Wednesday morning, from the exchange. “This is a long-term growth story, we don’t focus on words like ‘pop.’”
That sentiment didn’t diminish the excitement at the bell-ringing ceremony at the Nasdaq Stockholm exchange, where red confetti fell from the ceiling when shares started trading. About 300 people filled the exchange floor, with many clad in Verisure’s signature bright red color. The opening bell ceremony was live streamed to the security company’s offices around the world.
The company gained more than 60,000 new shareholders. Most of which were retail investors, Lally said at the exchange. Felicia Schon, an investment economist at retail trading platform Avanza said, there was “massive interest among our clients,” as expected.
“Stockholm has once again solidified its position as the most attractive listing market in Europe,” said Erik Skog, head of investment banking Sweden at ABG Sundal Collier. “The depth of the market is reflected not only in the large number of IPOs but also in the strong buying interest in the secondary market.”
The company will use the €3.1 billion it raised to pay down debt and buy ADT Mexico. Verisure’s credit rating was upgraded to Ba1, one notch below an investment grade rating, by ratings agency Moody’s following the IPO.
Management shareholders also raised about €55 million in the offering to cover taxes, and existing investors will sell more shares if an overallotment option is exercised. Lally said he isn’t selling any shares in the offering.
Founded in 1988 in Sweden, Verisure develops monitored security systems for households and small businesses in Europe and Latin America. The company’s products include video detectors and cameras, shock sensors and smart locks.
The IPO represents a return to public markets for the company previously known as Securitas Direct. The firm was taken private by EQT AB, then sold to Bain Capital and H&F in 2011.
H&F took majority ownership in 2015 and held about a 60% stake in Verisure before the offering. That will be diluted to about 46% after the offering, given the newly issued shares, according to the prospectus.
DNB Carnegie, Goldman Sachs Group Inc. and Morgan Stanley led the offering.
–With assistance from Swetha Gopinath, Anton Wilen, Guy Johnson, Lizzy Burden and Anna Edwards.
(Updates second paragraph with final trading and sixth paragraph with H&F response.)
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