(Bloomberg) -- United Internet AG has launched the listing of its web hosting arm Ionos Group in Frankfurt, presenting the first big test of Europe’s subdued initial public offering market.

The IPO will consist of the offering of existing shares held by United Internet and Warburg Pincus, with United Internet retaining a majority stake in Ionos following the completion of the IPO, the company said in a statement. 

Ionos’s owners, United Internet and Warburg Pincus, are eyeing a potential market value of as much as €5 billion ($5.4 billion) for the unit, Bloomberg News reported last month. United Internet owns about 75% of Ionos, with Warburg Pincus holding the remainder.

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Equity bankers will be watching closely to see if the Ionos listing can reopen Europe’s IPO market, which was effectively shut last year as rising interest rates and inflation kept investors on the sidelines. Proceeds raised from IPOs on European exchanges fell by more than three quarters in 2022, data compiled by Bloomberg show.

Companies and their advisers are now betting that pent-up demand for listings will help deals get away in the coming months. Motor parts maker Euro Group is another group potentially looking to test the market with an IPO in Milan in February.

Ionos, whose publicly traded peers include GoDaddy Inc. and Squarespace Inc., has more than six million customers, generated total revenues of €1.1 billion in 2021 and estimates to have achieved a total revenue growth year-on-year of 15% to 18% in 2022.  The company focuses on small and medium-sized enterprises in Europe and North America. It also runs a fast-growing cloud business that competes with firms including France’s OVH Groupe SAS and New York-listed DigitalOcean Holdings Inc. 

The Ionos IPO is being led by joint global coordinators JPMorgan Chase & Co., Deutsche Bank AG, Berenberg and BNP Paribas SA.  Goldman Sachs Group Inc. and Barclays Plc are joint bookrunners.

--With assistance from Julien Ponthus.

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