Italy’s chip player Technoprobe defies market drop

Italy’s Technoprobe is challenging choppy markets. Falling technology sector valuations have made investors nervous about new stock market listings. That’s not discouraging Chair Cristiano Crippa, who is seeking an equity valuation of up to 3.8 billion euros in a Milan listing next week. The group is one of the few large makers of devices that use thousands of tiny needles to test microchips’ soundness. That’s a sweet spot: Europe wants to pump 50 billion euros into the sector to host 20% of global chip production by 2030.

So far, Technoprobe’s bet seems to pay off. Its offer was fully covered on Monday, ahead of book closure. Sensible valuations are helping. At the top of the IPO range, and including 140 million euros of estimated net cash, the company’s enterprise value is nearly 18 times EBITDA of perhaps 200 million euros next year, Breakingviews calculations show. That’s a premium versus the 15.2 times of listed competitor FormFactor, but it reflects an EBITDA margin of 45%, twice that of its U.S. rival. Investors’ response implies confidence that the chip boom will continue. Reuters