Ovum agreed plans for an IPO in February at its annual shareholders’ meeting last Friday. The telecoms and software advisory and consulting firm has been discussing with some financial advisors over the least year in order to identify an optimal time to list its shares in London.
Apparently, sales as early as this September would have been possible. A later sale would certainly give Ovum’s executives more time to educate potential investors, and our opinion is that it will certainly lead to a better return for Ovum’s shareholders. In particular, this will allow investors to place a more accurate value on the acquisition of RHK Research.
However, a trade sale or merger still seems more likely than an IPO. The process of going public, and the resulting reporting burden, comes with high costs. Many people have pointed to a number of potential partners for Ovum: US analyst houses (notably AMR and Yankee); other information providers (such as Reuters or Thompson); and management consultancies (such as Accenture or Deloitte). Of course, the US administration’s commitment to maintaining a weak dollar makes a US buyer rather less likely.
In the telecoms market, which Ovum follows most closely, there is a huge growth of M&A between European players. Ovum’s analysis of this trend is favourable. If no US buyer can be found, then perhaps scaling up through the purchase of strong national players could give Ovum a stronger hold on the European market. Strong partners might include Pierre Audoin (a longtime partner of the Ovum Holway team), Berlecon Research, Sirmi and Grupo Penteo.