STJ advised Advent International, EBRD and Addiko Bank AG (“Addiko”) on Addiko’s c.€172m IPO on the Vienna Stock Exchange

15 July 2019

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Addiko is a fully licensed bank holding company in Austria which has been transformed under Advent and EBRD’s ownership since 2015 into an innovative unsecured consumer & SME specialist lender operating in five Central and South Eastern European countries: Slovenia, Croatia, Serbia, Bosnia & Herzegovina and Montenegro.

Addiko’s IPO was successfully completed on the Vienna Stock Exchange on Thursday 11th July, pricing at €16 per share and valuing Addiko at €312m. The transaction raised €172m corresponding to a 55% free float (assuming full exercise of the over-allotment option) on the back of a pure secondary sell-down of shares by Advent International and EBRD.

STJ’s advice spanned a period of over a year and our early involvement (particularly through our Strategic Research Advisory team) helped the Company to craft an optimal investment case as a uniquely positioned and focused consumer and SME specialist lender in the CSEE region.

The selection of a balanced bank syndicate proved crucial to the transaction, delivering the required quality and size of investor demand through very complimentary and diversified bank distribution platforms that accessed investors in Austria, the CSEE region, the UK and the US as well as specialist Emerging Markets and FIG investors.

An exhaustive and targeted early investor education programme was also ultimately vital to the offering’s success. Around 60 investors were educated by Addiko management in early-look and pilot fishing meetings prior to launch and this process meant a high order conversion of quality demand. STJ directly facilitated a number of key investor introductions and maintained dialogue with these investors throughout.

STJ provided real and early-warning transparency to enable fast and informed decisions at every step of the process and especially during a volatile launch period. Prior to the Addiko offering several IPOs had been restructured both as to price and size, or traded down significantly, or both. These included Global Fashion Group’s IPO (priced 25% below the initial range on a reduced deal size, and trading down 9% on the first day) Finablr (priced 17% below the bottom of the initial range on a reduced deal size, and trading down 7% on the first day) and the Traton IPO that had been reduced to a €1.55bn size on disappointing valuation, trading poorly in the initial aftermarket. On the same day as Addiko’s repricing, the ReAssure IPO on the LSE was pulled, due to insufficient demand and despite a highly attractive dividend yield and a very liquid transaction.

The Addiko IPO was not immune to this challenging market backdrop, and the IPO had to be repriced prior to official books close - in a fixed offer at €16 (approximately 16% below the original price range) which still allowed the full deal size and majority sell-down to be completed without change.  The price reduction produced a very rapid demand increase and enabled a very high-quality investor register. It also provided the foundation for a positive and stable aftermarket performance. In contrast with other re-launched IPOs in the market, Addiko opened very positively in the aftermarket at €17.70 (+10.6%) and traded in a narrow band to finish the day at €16.74 (+4.6% above pricing), reflecting investor buy-in to the quality of the Addiko story.

 

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