WE Soda IPO Canceled: Industrial Company Seeking $7.5 Billion Valuation Fails to Convince Investors

WE Soda, the world's largest manufacturer of soda ash, was set to be valued at around $7.5 billion in a London Stock Exchange IPO, which would have been the biggest UK flotation of the year and potentially put the company into the FTSE 100.

However, the IPO was cancelled a week after being confirmed due to extreme investor caution in London.

The decision was met with much wailing and gnashing of teeth, but it is clear that there was more to the decision than just investor caution.

Investors in London have been burned by companies with apparently enticing prospects in recent years, including THG, DR Martens, Moonpig, and Deliveroo, and companies looking to come to market need to do more to convince investors to buy their shares.

Ultimately, the decision came down to valuation.

WE Soda, an industrial company, was seeking a high valuation of 7 times its expected EBITDA, but the market was not willing to pay that price.

The company had good growth prospects and sustainability credentials, but the seller, Turgay Ciner, looked to be asking for too much.

The market was not prepared to pay that price due to signs of soda ash prices coming off the boil and new supplies becoming available.

The company's high valuation was also seen as a potential blow to the London market, but it is not an indication that investors were being overly cautious.