Christian Hansen Holding A/S, the Danish maker of food ingredients owned by private equity firm PAI Partners, will sell about 900 million euros ($1.2 billion) of shares in an initial public offering, according to two people familiar with the sale.
Christian Hansen plans to offer 450 million euros of new stock, while its existing shareholders will sell about the same amount, said the people, who declined to be identified because the information isn’t public yet. The Horsholm, Denmark-based company is slated to start taking orders for the IPO in mid-May before a final price is set at the end of the month, according to terms for the sale obtained by Bloomberg News.
Credit Suisse Group AG and JPMorgan Chase & Co. are managing the sale, with Morgan Stanley, SEB Enskilda Equities and Danske Markets Equities assisting, according to the terms.
Christian Hansen’s Copenhagen-based spokeswoman Kristine Ahrensbach and PAI’s head of investors relations Christilla de Moustier in Paris both declined to comment.
Private equity firms have taken advantage of a rebound in stock markets from their February lows to sell assets after returning less money to clients in 2009 than any year on record. Brenntag AG, the chemicals distributor owned by BC Partners Ltd., raised $1 billion in an IPO in March.
PAI paid about 1.1 billion euros for Christian Hansen in 2005. The firm hasn’t decided how many shares it will sell in the offering, according to the term sheet. PAI may retain a “large stake” in the Danish company, Christian Hansen Chief Executive Officer Lars Frederiksen said last week.
The maker of natural colors and specialty sweeteners used in drinks and ice creams last week reported earnings before interest, taxes, depreciation and amortization rose 30 percent to 78 million euros in the six months through February. Revenue in the period totalled 256 million euros.
PAI, which is based in Paris, cut the size of its 5.4 billion-euro leveraged buyout fund by half in December after two top dealmakers left the firm, prompting some investors to attempt to remove money from the pool.
Formerly the private equity unit of French bank Paribas, PAI targets companies worth more than 500 million euros. It owns stakes in United Biscuits, the maker of McVitie’s products, and the Cortefiel clothing chain in Spain. It also controls French homebuilder Kaufman & Broad, and FTE Automotive, a German supplier of car parts.
Buyout firms such as PAI typically use loans secured on the targets they acquire to finance about two-thirds of the purchase price, and cash from their own funds for the rest. The firms seek to improve performance at the companies they acquire or expand them before selling them within about five years.
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