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On 2 September 2020, Kooth plc, an online mental health service, its successful fundraising of £16 million and subsequent admission to trading on the alternative investment market of the London Stock Exchange. The company’s market capitalisation on admission was £66.1 million, and by the close of the first day of trading its share price had increased from the placing price of 200 pence to 240 pence per share.

Established in 2001, Kooth provides a range of digital mental healthcare services to the NHS, businesses and charities. It is the largest provider of these services to children and young people aged 10-25, boasting over 130 counsellors and emotional wellbeing practitioners, and contracts spanning 77% of all NHS Clinical Commissioning Groups across England. The company is well placed to take advantage of the increasing awareness of mental health issues and its online platform offers an anonymity that has proved to be advantageous in relation to individuals that may be deterred from seeking help as a result of the stigma associated with mental health.

With healthcare emerging as an attractive sector for investment over the past decade, the past three years have seen a rise in new listings on the London Stock Exchange, with AIM proving the more popular choice of market. However, on 26 August 2020, technology-led pharmaceuticals distributor, Umuthi Healthcare Solutions, its intention to seek admission to the standard segment of the Main Market. The announcement follows an ongoing trend to pursue a standard listing, as evidenced by our findings that over 50% of all the companies announcing an IPO on the Main Market in 2020 had opted for a standard, over a premium listing. For more on this story see: Standard listings in 2019.

The list of potential entrants to the standard segment of the LSE includes beauty and lifestyle specialists, The Hut Group. On 3 September, the company its intention to proceed in what is set to be the biggest IPO of 2020, with an expected market capitalisation of £4.5 billion on admission. It is believed that the decision to opt for a standard listing was made to allow for an unusual share structure that permits co-founder Matthew Moulding to veto any hostile takeover approaches for a period of three years.

The blockbuster transaction will be the biggest IPO since Aston Martin’s in 2018. The offer is expected to raise gross proceeds for the company of around £920 million with cornerstone agreements already in place committing £300 million from BlackRock, £100 million from Janus Henderson, £90 million from Merian and £75million from QIA. Clifford Chance LLP are acting as advisers on both English and US law.

There are signs that investor appetite may be returning after a three-month hiatus, with the number of companies announcing an intention to float in July and August 2020 slightly up on the figures in 2019. On 25 August, Triple Point Energy Efficiency Infrastructure Company plc its intention to seek admission to trading on the Specialist Fund Segment of the Main Market, combined with a target issue of £200 million and a placing programme that will allow the company to issue up to a further 200 million ordinary shares in aggregate. Similarly, on 2 September, Tellworth British Recovery & Growth Trust plc plans to float on the London Stock Exchange and raise up to £100 million via an initial placing and initial intermediaries offer of ordinary shares, with flexibility to raise up to £500 million.