digibyte - cash on the line derails thetrainline.com's IPO

Profile picture for user slauchlan By Stuart Lauchlan January 22, 2015
Summary:
It was to be the first UK tech IPO of 2015, but thetrainline.com has found a cash buyer instead.

A familiar sight

In the UK we’re all too used to trains suddenly being delayed or cancelled with no notice as the planned timetable is abandoned. So it’s appropriate in some respects the planned IPO of thetrainline.com is mirroring the practice of the industry sector it operates in.

Earlier this month the online train ticketing company announced plans to go for an IPO. Yesterday those plans were abandoned in favour of a £500 million buyout by US firm KKR, a sum larger than thetrainline.com expected to raise on the London listing.

thetrainline.com is currently owned by private equity firm Exponent and it’s believed in the City that it had always preferred the idea of finding a buyer than going for a public listing. It was bought by Exponent in 2006 for around £160 million.

So all good for Exponent and for thetrainline.com, but Techmarketview’s Richard Holway makes an interesting point:

There seems to be growing number of examples recently of PE trumping IPO valuations for PE owned companies. Travelex was another recent example. Personally I think that’s a worrying sign. Maybe these PE houses have just too much cash now and need to find a home for it – whatever the valuation. Think we might have been here before – and the outcome before was not pleasant.

My take

My views remain unchanged from: Is thetrainline.com’s ticket to ride valid on the route to the stock market?