Public listings in Switzerland have become so rare that they attract attention for that reason alone.

This is especially true for the planned IPO of Swiss Marketplace Group (SMG). The offering is significant in terms of scale – the post-IPO valuation is said to be around 4.5 billion francs – and involves players of considerable public interest: On the selling side stand media titans Pietro Supino and Michael Ringier with their publishing houses TX Group and Ringier.

From Homegate to Ricardo to Autoscout24

The newly listed entity, SMG, includes some of Switzerland’s most important online platforms – from real estate portal Homegate to car marketplace Autoscout24 to the online auction site Ricardo.ch and financial intermediary Moneyland (mortgages, insurance, telecommunications).

SMG was designed from the outset to be floated on the stock market. That was clear as early as 2021, when Ringier and TX Group combined their online platforms into a joint venture, each taking about a 30 percent stake, and brought in insurer Mobiliar (30 percent) and New York-based private-equity firm General Atlantic (10 percent).

An IPO long in the making

In other words: a listing is part of SMG’s DNA. The only questions ever asked were about timing and structure, not whether it would happen. Now the moment appears to have arrived: finews.com spoke to numerous capital markets insiders, and no one doubts that the big announcement is imminent.

None of the parties directly involved will confirm it just yet. On Tuesday, both publishing houses declined to comment on the listing. TX Group said: «We will be pleased to comment on possible implications and decisions when the time is right.» A final decision had not yet been taken, it added. UBS, slated to play the key role of global coordinator, was equally terse: «We have no comment.»

IPO volume of 1 billion

SMG said in a statement: «Since its founding in 2021, SMG and its shareholders have openly communicated their intention to pursue an IPO. In line with this strategy, and building on strong performance across all business areas, SMG has taken initial steps and is now at an advanced stage of preparing for a listing. This intention remains unchanged. However, no final decision has yet been made regarding the IPO or its possible timing.»

Based on finews research, the following seems clear: Between 20 and 30 percent of equity will be floated. As Bloomberg reported a few days ago (article behind paywall), the underwriting ahead of trading is expected to raise 1 billion francs for that stake.

UBS in the lead

Typically, the three lead banks – UBS, J.P. Morgan and Goldman Sachs – will raise around 80 percent of the volume, while smaller joint bookrunners (named in line with a non-public Mergermarket report as ZKB, Barclays, BNP Paribas and Morgan Stanley) each account for about 5 percent.

UBS’s strong position in the deal is no accident: As a Swiss bank combining investment banking and wealth management, it is uniquely positioned to channel investments in the hundreds of millions via its wealth management arm. It is also one of the few banks with the licenses and infrastructure to technically process the listing at the Swiss stock exchange.

A rare opportunity

Few doubt the IPO will succeed: Nobody expects the banks to struggle to place shares. With its strong position in Switzerland’s classifieds market – in real estate, automobiles and auctions – SMG looks like the prototype of a safe investment. Its domestic-focused business model is largely immune to the current turbulence around U.S. tariffs.

That makes it highly likely that the existing owners – Ringier, TX Group, Mobiliar and General Atlantic (all of whom are widely expected to contribute proportionally to the float) – will celebrate a successful listing. The banks involved, led by UBS, are also poised to benefit.

Surrounded by questions

Like every major event, however, the SMG IPO is clouded by questions.

The first concerns valuation. Yesterday, SMG reported its half-year results alongside shareholder TX Group. SMG posted revenues of 161.5 million francs in the first six months (up 14.4 percent from a year earlier) and adjusted EBITDA of 87.6 million francs (up 34.3 percent), equal to an adjusted EBITDA margin of 54.3 percent (up 8.1 percentage points year-on-year).

Rich multiples…

At a projected post-IPO valuation of 4.5 billion francs, the implied multiples are lofty and still to be tested in the market: On an annualized basis, SMG would trade at 14 times revenues and 26 times adjusted EBITDA.

«Stretching, but not unrealistic,» is how market insiders describe it. But investors would clearly be buying into a «growth case,» where sustained revenue and/or margin expansion is a prerequisite.

…but impressive margins

In both areas, SMG has performed well in recent years, though not spectacularly. Revenues have grown about 15 percent annually, with margin expansion recently slowing somewhat.

International peers such as Baltic Classifieds Group, with a similar business model and comparably strong market position in a geographically bounded market, posted an EBITDA margin of 78 percent in its latest fiscal year. Online auto marketplace Autotrader reported around 65 percent.

The big question

SMG aims to grow revenues and profitability through value-added services such as mortgage referrals on Homegate or car insurance through Autoscout24.

Still, many ask how much room remains for revenue growth given SMG’s already dominant position. To reach a more typical valuation of ten times EBITDA, SMG would need to more than double its EBITDA in the near term (from about 175 million francs annualized toward 450 million). Does that potential exist in Switzerland? That is the big question.

What does the IPO mean for strategic investors?

Regardless, the IPO has major implications for Ringier and TX Group, who together held a controlling 60 percent of SMG.

Their combined stake will be diluted to around 40 percent, and it is widely assumed that General Atlantic and Mobiliar will reduce their holdings further over time – General Atlantic for standard private-equity exit reasons, and Mobiliar because of concentration risk tied to its 20 percent stake in Ringier, which is not considered particularly liquid.

TX Group largely exposed without SMG

For TX Group (and to a lesser extent for Ringier), the SMG stake is a crown jewel. Unlike its traditional media operations, it generates generous returns. TX Group’s half-year results make that plain: Its TX Markets segment – comprising its 30.72 percent in SMG plus a 50 percent stake in smaller player Jobcloud – contributed 43.5 million francs to the group’s adjusted EBITDA of 38.5 million francs.

In other words: All other business areas – Tamedia (with «Tages-Anzeiger» as flagship), «20 Minuten», ad marketer Goldbach and the venture unit TX Ventures – together posted a loss.

Even allowing for some one-off effects, the picture is clear: Without the SMG stake – masterfully structured by family head Pietro Supino and now partially up for sale – TX Group’s business outlook is far less promising.

«Strategic investment»

The joint controlling influence of Ringier and TX Group will be lost in the IPO. Whether a roughly 20 percent holding each can still be called «strategic» is hotly debated. Presenting annual results yesterday, TX’s Supino insisted the company continues to rely on the «strategic» twin pillars of online marketplaces and media.

What seems clear is that the IPO’s timing was driven above all by the more opportunistic group of investors – namely General Atlantic, Mobiliar, and SMG’s management. Given the generally tepid IPO climate, shares are likely to be sold at a discount ahead of listing. Will it be 5, 10 or even more percent? Sources won’t say.

How deep is the discount?

Depending on that discount, it might have been wiser for Ringier and TX Group to wait until shares could be placed at par. But as the saying goes: «Better a bird in the hand than two in the bush.»

After the listing, SMG will need to move quickly to show investors it can deliver on its ambitious promises.

An uncertain media future

Ringier and especially TX Group will also have to show their hand sooner or later: Was the SMG IPO preparation for an exit from media, or can the two houses reinvent themselves once again in that business?

For its part, TX Group has announced a share buyback program «of up to a mid-single-digit percentage of outstanding share capital»: «The buyback at market price will be carried out on a second trading line with subsequent cancellation of shares (capital reduction) and is expected to begin in the coming weeks.»