No sign of float exhaustion

THE stock market may be wobbling, but new flotations are returning to levels not seen since 2000. Car repair chain Kwik-Fit, supported by CVC Capital, is the latest private equity-backed firm to explore a float, which could value it at up to £750m.

Tom Lamb, at Barclays Private Equity, said 'it is getting time to empty your garage' for private equity firms.

'The new issue market seems to be open for business suddenly and there is a pent-up demand,' he says. 'There are many companies-which have no obvious trade buyer.'

There have been 23 floats since January.

Lamb says: 'We have three or four things in our portfolio where we have been actively approached by sponsors who think they can float.'

Last week, Irish telecoms group Eircom refloated, valued at £780m. Cambridge Silicon Radio, which came to market last month, ended its first day valued at almost £300m, proving the appetite for technology floats has returned.

Halfords, also backed by CVC, is understood to be in advanced talks about a £1bn float. Golden oldies firm Saga is a candidate for a £1bn-plus flotation.

A queue of companies valued at less than £100m has formed, including nursery chain Leapfrog at £65m and temporary builder PHL Group at £40m.

Lamb, whose firm sponsors the Centre For Management Buy-Out Research, says it is difficult to see how all the proposed floats will get away.

'The stock market veers between pessimism and optimism and occasionally hits reality. The quality threshold comes down and then there is scope for disappointment.'