U.S. Markets close in 4 hrs 29 mins

Permira-backed TeamViewer defies European IPO drought

Leah Hodgson

PE-backed software company

TeamViewer has announced plans to go public on the Frankfurt Stock Exchange by the end of the year. The offering could be one of

Germany's largest listings since 2017, per the PitchBook Platform, with the expected valuation said to be between €4 billion and €5 billion (between around $4.4 billion and $5.5 billion).



Based in the city of Göppingen, TeamViewer develops a platform for online meetings and remote desktop access that has been installed on over 2 billion devices. Last year, the company reportedly generated sales of €230 million and EBITDA of €121 million.



Permira bought the business in 2014 for a reported €870 million from

GFI Software. The PE firm is anticipated to sell between 30% and 40% of its shares, according to the Financial Times, but is said to be retaining its position as a majority stakeholder. Permira was reportedly approached by

Hellman & Friedman and

Vista Equity Partners in 2017, with each firm offering separate bids of some $2 billion to acquire TeamViewer.



If successful, the listing bucks a trend that has seen a significant drop in European IPOs. According to data from PitchBook, public offerings on the continent are at their

lowest levels in nearly a decade. So far this year, 106 European companies have gone public compared with 311 last year. What's more, very few of the companies that debuted on the markets this year raised large amounts of cash.



Only three businesses from the continent have broken the €1 billion mark in eight months. The largest IPO came courtesy of Italian lender

Nexi, which priced its shares at €9 apiece to raise more than €2 billion in April. Europe's second-biggest listing of the year saw

Volkswagen's truck and bus unit Traton make its stock market debut at €27 per share which brought in €1.55 billion. The final company that raised at least €1 billion is

Trainline, the developer of a platform offering train and bus tickets. The

KKR-backed business secured £951 million (around $1.2 billion at the time) by floating in London.



Some European businesses have avoided the markets altogether or backed out of scheduled IPOs. In July,

Swiss Re pulled plans to list its UK life insurance arm

ReAssure, which could have given the business a market cap of up to £3.3 billion. The group cited weak demand and heightened caution as its reasons, suggesting that certain political events may play a role in IPO suspension.



Of course, Brexit gets some of the blame, especially in the UK, but political uncertainty may not be the only reason for the lackluster demand for IPOs. Considering share price performance, European businesses haven't been the best performers when going public. Traton's stock has pretty much been on a downward spiral since the company's June IPO—closing Wednesday at just over €22 per share—while Nexi's stock fell a reported 6.2% on its first day. And we all know the debacles that were the

Aston Martin and

Funding Circle listings.



Still, there is hope that if it is executed, TeamViewer's public debut will fare better than some of its peers, with its profitability and the attractiveness of the software market.



Featured image via Emilija Randjelovic/iStock/Getty Images Plus