Contrary to reports that an IPO for the retailer has been abandoned, a source close to the negotiations says Isis is embarking on a dual-track process as it pursues a suitable exit for the business.
‘Isis is considering both public market options and M&A options, and continues to investigate the public company options,’ says the source, who adds that the firm is ‘quite early in investigating its options’.
Investment bank Rothschild has been appointed to provide strategic advice on the process. It is understood that Isis will meet potential bookrunners, which are commonly the main underwriter of an IPO, after the summer. However, any deal is subject to the market conditions.
Wiggle has proved a successful investment for Isis, which has owned 65 per cent of the business since 2009. Founded by Harvey Jones and Mitch Dall in 1999, the business sells adventure equipment with a focus on swimmers and triathletes.
In mid-2008, Wiggle began expanding internationally, and since then, sales have increased notably with the company reporting a massive increase in turnover from £33.15 million in 2009 to £86.79 million in the year ended January 31 2011. Profits have also soared from £4.51 million to £10.53 million in the same period.
The news that an IPO remains an option for the business confirms a recent report from accountancy firm Ernst & Young that finds a strong pipeline of London public offerings remains, ‘waiting in the wings for the market to stabilise’.
Ernst & Young’s IPO Eye, a quarterly publication of IPOs on the London Stock Market, reports that following a quiet first quarter, IPO activity increased during the second quarter of 2011.
There were 16 IPOs during the quarter, up from four in Q1 2011 and from 12 in the same quarter last year. Main market floats increased from two to three in Q1 2011 and AIM floats from two to 13.
However, notably, none of the companies listing in the quarter were private equity backed.
The report says, ‘We anticipate a slowdown in IPO activity in Q3, due to the Eurozone sovereign debt issues potentially coming to a head and the usual City summer break, but we would expect Q4 to see a further uplift in activity.’
