Irish Equity Capital Markets 2018 review 2018 snapshot

2018 saw a reduction in Irish equity market fundraising after a particularly strong 2017. Despite this, an increase in successful share placings ensured that equity fundraising remained robust in 2018. The experience in the UK markets was2018 broadly similar, snapshot2018 supported snapshot by a number of high profile IPOs in H2. 20182018 snapshotsnapshot 2018 €1.7bn €72mn 2 €1.6bn

Raised via placing/ Total equity raised Raised via IPO Number of IPOs rights issue

2018 1.7b2018 n 1.7b72mn 72m2 2 1.6bn 1.6bn TOTAL EQUITY2018 RAISEDTOT1.7bAL EQUIT RAISEDY RAISEDn VI A IPO RAISED72m VINUMBERA IPO OF 2NUMBERRAISED OF VI A PLACING/RAISED1.6bn VIA PLACING/ TOTAL EQUITY RAISED RAISED VI IPOsA IPO NUMBER IPOsRIGHTS OF ISSUE RAISEDRIGHTS VI ISSUEA PLACING/ 2018 1.7bn 72m 2 IPOs RIGHTS1.6bn ISSUE

2017 TOTAL EQUITY RAISED RAISED VIA IPO NUMBER OF RAISED VIA PLACING/

2017 5.1bn 2017 €5.1bn5.1bn 4.2bn €4.2bn4.2bn3 IPOs3 0.9bn3 RIGHTS0.9bn €0.9bnISSUE

2017 5.1bn 4.2bn 3 0.9bn

Transaction volumesTransaction2017 5.1b volumesn 4.2bnISE market capitalisationISE3 market capitalisation 0.9bn ISE equity raisesTransactionISE equity2016 to raises volumes2018 2016 to 2018 ISE market capitalisation TransactionISE equity raises volumes 2016 to 2018 ISE market capitalisation ISE equity raises 2016 to 2018 140 140 120 114200 100 114120000 80 1120800 60 1080060 40 806040 20 604020 Total market cap (€bn) 0 Total market cap (€bn) 40200 Total market cap (€bn) 2016200 20172016 20182017 2018

2016 20162017 20172018 2018 Total market cap (€bn) 2016 2017 2018 0 2016 2017 2018 IPOs RightsIPOs Issues Rights Placings Issues PlacingsMMainain MMarket arket MMainainJuniorJ 2 uMMarket0na16iork rMarket etM a2rk0Junioret J17(ESM)u (nEioS r MMarket 2M)0a18rket (ESM) (ES M) 2016IPOs Rights2017 Issues 2018Placings MMainain MMarketarket JuniorJunio rMarket Market (ESM) (ES M) IPOs Rights Issues Placings MMainain MMarketarket JuniorJunio rMarket Market (ESM) (ES M) Equity raised Equity2016 to raised 2018 on2016 public to 2018 markets on public markets Equity raised 2016 to 2018 on public markets 2016 2016 2016 2016 IrelandEquity 2017 Irelandraised 20160.5bn 20162017 to 2018 on0.5bn public marketsUK 2017 UK 20162017 (ISE) 2018Ireland (ISE) 20172018 0.5bn (LSE) 2018 UK(LSE) 20172018 (ISE) 20162018 (LSE) 20162018 Ireland 2017 0.5bn UK 2017 5.1bn (ISE)5.1bn 2018 £41.2bn (LSE)£41.2bn 2018 5.1bn £41.2bn

5.1bn 1.7bn 1.7bn £41.2bn 1.7bn £30.5bn £30.5bn £35.9bn£30.5bn £35.9bn 1.7bn £35.9bn £30.5bn £35.9bn

IPOs RightsIPOs IssuesRights Placings Issues Placings IPOs Rights Issues Placings 1 EQUITY CAPITA1L MARKETSEQUITY REVIEWCAPITAL 2018MARKETS REVIEW 2018

1 EQUITY CAPITAL MARKETS IPOsREVIEW 2018 Rights Issues Placings

1 EQUITY CAPITAL MARKETS REVIEW 2018 2018 review

2018 review : A more challenging backdrop for Irish Equity Capital Markets (‘ECM’)

2018 ECM fundraising in Ireland declined from the high Irish companies listed on the Stock Exchange levels seen in 2017, during which the flotation of AIB was remained active, with notable equity raise and class the largest IPO in Europe. Issuers faced more challenging disposal activity successfully executed by DCC and conditions, with market corrections in February, October Greencore respectively. and December. There were also a number of successful IPOs by Irish IPO activity in Ireland was subdued, with just two IPOs issuers outside of the traditional Irish and UK markets pricing in 2018. Several other potential issuers across (notably IPL Plastics, Inc. listing on the Toronto Stock a number of sectors chose to postpone planned IPO Exchange), illustrating the range of options open to processes, or to pursue alternative forms of capital scaling companies in the current market. raising, in light of the prevailing market conditions and In the UK market, equity fundraising declined by investor sentiment. approximately 12% in 2018 relative to 2017, however a However, several notable transactions were executed by number of large IPOs were completed in H2 2018. After- Irish plcs in 2018, with fundraisings by listed companies market performance has been mixed, although UK IPOs exceeding 2017 in both volume and value terms. that priced in 2018 outperformed major UK indices. Fundraising via placing and rights issues increased by over 80%, driven by fundraising by companies undertaking M&A activity and by companies seeking to strengthen their balance sheets and increase financial flexibility.

Thought leadership title 3 2019 outlook

2019: Outlook for the year ahead

As we move into 2019, we expect to see another year The outlook for interest rates will remain an important of market volatility driven by Brexit, rising interest rates, driver of investors’ appetite to deploy capital in this potential trade wars and the threat of further market sector. corrections. These factors will continue to drive both Despite the lower IPO count in 2018, the conclusion of issuer and investor sentiment, and could affect the overall several successful fundraising processes clearly shows appetite to undertake capital markets transactions, that a listing remains an attractive strategic option particularly in the first half of the year. for high quality, well-managed companies. Notwithstanding this, as Irish plcs look to take advantage A feature of the IPO market in recent years has been of market opportunities in Ireland and overseas, we for companies to consider the merits of a dual track anticipate potential further equity fundraising and exit / fundraising process, which can provide increased acquisitions by companies seeking to leverage their flexibility and reduced execution risk in uncertain strong trading performance and balance sheets to deliver markets. growth and increase shareholder value. As we look ahead to 2019, we encourage potential listing Takeover activity may become more prevalent should candidates to maximise the potential for a successful equity prices fail to recover from market corrections deal through early preparation. When markets exhibit experienced in late 2018, and plcs should consider volatility and uncertainty, flexibility to launch is critical, defensive strategies to resist undesired approaches. making it essential to be transaction-ready. The investment funds sector continued to exhibit robust equity fundraising activity in 2018, demonstrating the ongoing attractiveness of sustainable yields across a variety of asset classes. Our equity capital market services Pre-IPO Pre-IPO readiness assessment Independent IPO advisor • Identifying the financial areas critical to • Independent evaluation of IPO feasibility a successful IPO • Early identification of IPO critical success • Minimises delays and additional costs factors later in the process Systems/Controls (FPPP) Tax structuring • Advice on appropriate corporate • Tax structuring advice including areas governance procedures, financial such as the domicile of TopCo and re- reporting activity and organisational registration vs. NewCo structure in advance of commencing the • VAT treatment advice IPO process IPO execution IPO reporting accountant Independent IPO advisor • Financial, tax and commercial due • Independent advice on equity story, diligence to give you comfort during the positioning, valuation and investor listing process marketing • Assess the control and governance • Sounding board on key IPO decisions frameworks and benchmark against listed • Support in selection and oversight of IPO company requirements bank syndicate • Sign-off on the financial information included in the listing document Company support and accounting advisory • Additional resource to support your • Advice on IPO structuring from an finance team with: project management; accounting aspect (including impact model building; IPO related memorandum assessments of new IFRS and accounting drafting; accounting policy manual position papers) drafting; additional assistance with any • Advice on preparation of annual report tasks normally performed within your (including benchmarking against peers) finance team • Advice on on-going accounting • Preparation of historical financial requirements as a listed company and information (including carve-outs and training on new IFRS GAAP conversions) • Distributable reserves analysis Post-IPO PLC reporting accountant ECM advisory Investor relations support • Full reporting accountant • Independent financial advice • Independent investor suite of services for post- for PLCs seeking to raise perception studies IPO transactions (e.g. equity to fund M&A or • Advice on investor relations acquisitions, disposals, enhance capital structure best practice reverse takeovers, rights • Advice for shareholders • Supporting effective issues, etc.) seeking to buy or monetise engagement with high a stake in a public company quality institutional investors

Thought leadership title 5 KPMG credentials

IPOs

Due diligence accountant for Reporting accountant to Reporting accountant to Cairn ConvaTec Group plc on its IPO plc on its Homes plc on its IPO on the on the LSE IPO on ESM and AIM LSE

KPMG Transaction Reporting accountant to IPL Services Reporting accountant to Plastics, Inc. on its IPO on the Glenveagh Properties plc on Toronto Stock Exchange its IPO on the ISE and LSE

Provided IPO readiness Reporting accountant to Reporting accountant to Malin services to AIB in respect of its Oneview Healthcare plc on its Corporation plc on its IPO on IPO on the ISE and LSE IPO on the ASX the ESM Other equity capital market transactions

Reporting accountant services Advised Group Reporting accountant to in connection with the merger plc on its successful defence Greencore Group plc for its of Paddy Power plc and of International Paper’s acquisition of Peacock Foods Betfair Group plc unsolicited approach and subsequent disposal of its US business

KPMG Transaction Advised plc on Services Reporting accountant to its investment in Dole Food Aminex for its Class 1 farm-out Company, Inc. transaction

Reporting accountant in Reporting accountant to Fyffes Reporting accountant to Cairn respect of UDG Healthcare plc in respect of its disposal to Homes plc on plc’s Class 1 disposal of its Sumitomo its listing on the ISE distribution businesses

Thought leadership title 7 Contact us

Mark Collins Partner, Head of Transaction Services KPMG in Ireland

t: +353 1 410 1407

Brian Egan Director, Transaction Services KPMG in Ireland

t: +353 1 700 4249

Report Methodology Notes: Data in this report has been sourced from Dealogic and the Irish Stock Exchange website. Data relating to “Average returns in 2018” for FTSE100 and FTSE All-Share has been sourced from Thomson Reuters Datastream. Data contained in this report has been generated at 31 December 2018 and includes priced transactions only. In this document, Ireland includes the ISE Main Securities Market and Enterprise Securities market (ESM), and UK includes LSE Main Market and Alternative Investment Market (AIM). Where report refers to “Placings”, this consists of accelerated transactions (including rights issue rump placings), bought deals, fully marketed follow-ons, cash placings, PIPE transactions, at-the-market transactions, top-up placement transactions, and registered direct offerings as per Dealogic and ISE classifications. Where the report refers to “Rights Issues” this consists of rights issues and other guaranteed preferential allocation transactions as per Dealogic classifications. Note that Dealogic data only captures Rights Issue deal volumes when the results of the rights issue are announced, post-trading of the rights. Aftermarket performance across Main Market and AIM IPOs has been calculated by taking a weighted average of the percentage change between the offer price and prevailing closing share price as at 31 December 2018 over all IPOs that have been successfully admitted to trading in the period; weighted by Market Capitalisation upon successful completion of the IPO.

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