Broker Marex has his planned Listing, raising concerns that investors may be more cautious about new companies going public.
The London-based broker, which is controlled by two former Lehman Brothers investment bankers following a private equity takeover in 2010, announced its decision late Tuesday evening.
“Despite the broad investor interest of high-quality institutions in the Marex business and the prospects, the company has decided not to continue the IPO due to more difficult market conditions for the IPO,” said a statement.
The company, one of the brokers with trading rights on the historic floor of the London Metal Exchange, had intended to list on the main market of the London Stock Exchange and aim for a valuation of $ 650 million to $ 800 million.
Another private equity-backed float, fuel cell company Elcogen, also withdrew its plans to list on the London junior market on Wednesday. The first quarter was the LSE’s strongest start to the year in 15 years as more than £ 15bn of equity was raised in the three months to March.
Marex, which offers trades and derivative hedges to large commodity producers and consumers, has grown aggressively through acquisitions since a private equity buyout a little over a decade ago. It was led by the JRJ Group, a private equity firm founded by Jeremy Isaacs, former head of Lehman’s European operations, and Roger Nagioff, former head of the global bond bank.
Brokers had speculated that Marex would be put up for sale in recent years as JRJ sought an exit from its investment. The private equity group announced that it would sell its 41 percent indirect economic stake through the listing.
The company posted pretax profits of $ 55 million for the year ended December, compared to $ 46.6 million last year on net sales of $ 414.7 million. Purchases under JRJ include Spectron, a commodities broker for $ 154 million, London-based Tangent Trading and Chicago-based equity derivatives company XFA.
London-based Marex employs approximately 1,000 people and is one of nine members of the Ring, the LME’s historic open outcry trading floor, the faced closure until a pushback from users. It has a market share of 16 percent in the LME.