The UK may have been gripped by IPO fever over the past few months, but the results haven’t always been happy. As the likes of Just Eat, Card Factory and Pets at Home discovered, a buoyant equities market doesn’t necessarily equal willing investors. Particularly when valuations are unreasonably high.
Nevertheless, SSP – the owner of soggy baguette purveyor Upper Crust – confirmed this morning it’s planning to list anyway, (hopefully) raising £500m in the process. The company dubs itself the ‘food travel experts’: it operates just under 2,000 fast food outlets in airports and train stations in 30 countries, including Europe, Asia and the US, and franchises brands like M&S Simply Food, Yo Sushi and Burger King.
Kate Swann, the company’s chief executive (she of ‘turning WHSmith’s fortunes around’ fame – although her cost-cutting inspired the @WHS_Carpet Twitter account in the process) is apparently looking forward to it.
Will it go down well with investors? The company’s most visible brands (Upper Crust, Millie’s Cookies, etc) seem pretty old hat compared with the likes of Pret a Manger and Eat, but, as a spokesperson pointed out to us this morning, those are actually a small part of its business.
But investors do have cause to be uneasy – and not just because of how volatile the market for new listings is. Owned by Scandinavian private equity firm EQT, SSP has the potential to become one of those companies whose private equity owners squeezed every last drop of potential profitability from it, before floating it and making a swift exit. As is traditional, EQT has agreed to a lock-in period during which it can’t sell its stake – but it’ll be interesting to see what happens after that. Private Equity doesn’t have a great reputation for loyalty…