February has seen the kick-off of European PE-led IPOs in 2025, with two “mid-market” IPOs Diagnostyka (MidEuropa -led & listed on Polish Stock Exchange) and HBX Group (Cinven, CPPIB, EQT-led & listed on the Spanish Stock Exchanges[1]) coming to market.
As a leading medical diagnostics company based in Poland (Diagnostyka) and a technology-based distributor of travel accommodation (HBX Group) based in Spain, both IPOs perfectly align with the current theme in European Buyout markets. Healthcare and Tech are deemed to be the most attractive sectors for Entry and Exit, with stable and robust Execution Pipelines in both private and public markets. Upcoming notable IPO candidates under PE ownership such as Stada (Bain & Cinven) and Brainlab (EMZ Partners) (both Germany) underscore this trend.
After a few successful (however still selective) PE-led listings in 2024 (such as Galderma, Renk and Springer Nature where Jamieson Corporate Finance has provided advice to selling and reinvesting shareholders), selling PEs were hopeful for this year’s first IPO window.
Both Diagnostyka and HBX have been long portfolio holds (acquired 2011 and 2016 respectively) and subject to previous Exit attempts. Both can also be defined as “mid-market” IPOs (market values at IPO at ca. EUR 0.8bn and EUR 2.8bn respectively) which are usually more difficult to float. However, the ability to list these portfolio companies illustrates that IPO as an Exit route for European PE is still very much an option.
[1] We supported the Management and minority shareholders of HBX Group in their successful IPO
2024 IPO Pricing trends continue, with significant impact for Management shareholders
In our Q1 2024 PE-led IPO update I described the significant impact IPO discounts have on management’s MEP packages and the alignment of economic interests at IPO between PEs and their portfolio companies’ management teams. This trend seems to continue this year, i.e. HBX was offered at a significant >30% discount to its closest peer[1] in order to attract a strong order book with robust long-only Investor exposure.
With such heavy discounts to remain part of the IPO script, Management Teams will need to pay attention to the impact on the value of their MEPs at IPO.
MEPs have outsized exposure to Ordinary Equity in the capital structure of a PE-owned company. It’s the instrument that provides a higher return but also risk curve for shareholders vs Preferred Equity or Shareholder Loans. The latter instruments are predominantly held by the Institutional shareholders (PE) and remain largely unaffected by significant IPO discounts. Ordinary Equity and MEP shareholders however see their shareholdings at IPO (both in EUR and # of shares) fluctuate significantly depending on where the IPO buy and sell-sides land on the valuation at IPO and hence IPO discount.
As in 2024, additional incentives at/ post IPO remain a useful tool to mitigate disproportionate value impacts on MEPs. Additionally – and if structured and communicated effectively – they can help transmit a strong and effective message to public market investors and hence strengthen the overall equity story.
Cash bonuses at IPO – predominantly used to reward extraordinary contributions by selected Managers – can be used as a tool to significantly increase C-Suite/ key management’s reinvestment levels into listed shares at IPO, underscoring the idea that managers continue to have significant “skin in the game” post-IPO. We have also seen and structured share-based incentives for senior managers, granted at or shortly before an IPO and with payout or vesting conditions subject to share price performance and retention levels post-IPO.
Management’s In and Outflows at IPO: Structure and Communication is key
While these incentives can have a substantial and tangible impact for senior managers, a key and more holistic aspect of the IPO script revolves around the communication of management incentives and MEPs in the IPO prospectus itself. All cash in and outflows are commonly disclosed pre-IPO, including separate sections for Management shareholdings at and post-IPO. Transparency has been and continues to be key.
Reinvestment rates (out of total IPO post-tax and loan proceeds) for the HBX Group’s key senior management (excl. CEO) were on average 60% with the CEO at 75% however significantly higher. Diagnostyka’s founders and key management reinvested all of their proceeds at IPO, i.e. 100%.
Additional Incentives (either in the Form of Cash or Shares) and key C-Suite’s Sell-Down and Reinvestment %/EUR amounts remain a key focus for public market investors. The HBX Group’s prospectus contains a dedicated Intro section that creates full transparency by laying out the C-Suite’s cash in and outflows at IPO. As part of Diagnostyka’s ITF (Intention-to-float) announcement, one of the key messages was that founders and key management would not sell any of their shares. The timing and clarity of this statement reflected the importance of this public message in the run-up to the IPO bookbuilding phase.
Jamieson Corporate Finance – IPO advisory
We have advised Management Teams and minority shareholders in numerous PE-led IPOs over the last years (Renk Group, Galderma and Springer Nature in 2024 and so far in 2025 HBX Group)
While we predominantly focus on the treatment of the existing MEP programme at IPO, our newly formed Remuneration Advisory team headed by Tony Gilbert advises CEOs and management teams in discussions with the Supervisory Board on the future PublicCo compensation scheme.
We continue to advise management teams in ongoing IPO/ dual-track processes in Europe and maintain open communication channels regarding IPO structures and economics with various market participants, i.e. investment banks, private equity funds as well as legal and tax advisors.
As always, please reach out should you want to discuss– very happy to connect and compare notes.
Daniel Meschaninov is a director in the team at Jamieson and has extensive experience with IPO transactions.
[1] Source: ION Analytics | Mergermarket
