Stock Spirits Group, the central European distiller owned by Oaktree Capital Management LLC (OAK), is seeking a valuation of as much as 800 million pounds ($1.3 billion) in its initial public offering, said people with knowledge of the sale.
Stock Spirits, the largest vodka maker in Poland and Italy, may be valued at 600 million pounds to 800 million pounds, the people said, asking not to be named as details aren’t public yet. Stock Spirits will seek about 52 million pounds through the sale, the company said today in a statement.
Oaktree, which had attempted to list the distiller in 2011, comes to the market at a time when the volume of IPOs in Europe, the Middle East and Africa has tripled to about $15 billion, according to data compiled by Bloomberg. Oaktree plans to remain the largest shareholder after the transaction, though the company will sell some stock in the IPO.
Stock Spirits said it would use proceeds to repay a portion of debt, leaving it poised for expansion. “The main reason we’re IPOing is to get our balance sheet in shape so we can fund meaningful acquisitions,” Chief Executive Officer Christopher Heath said in a telephone interview.
The company will seek to expand through brand extensions and takeovers in countries between Poland and Russia, including Hungary, Latvia and Ukraine, he said. “We’ll acquire businesses with strong, well-recognized brands,” Heath said today, adding that there has been little consolidation among smaller companies in central and eastern Europe.
The IPO market has become less challenging since the last attempt to sell shares in 2011, Heath said. Stock Spirits said that year it would continue to be owned by Oaktree after potential bidders including Diageo Plc (DGE) and Bain Capital LLC balked at an asking price said at the time to be more than 700 million euros ($946 million).
The IPO will leave at least 25 percent of the shares freely traded and should be completed by the end of October, Heath said. The IPO could raise 200 million pounds to 250 million pounds, said one person familiar with the sale.
Stock Spirits, which was bought by Oaktree in 2007, reported revenue of 292.4 million euros in 2012.
The syndicate for the IPO comprises JPMorgan Chase & Co.. Nomura Holdings Inc., Jefferies Group LLC, and Joh. Berenberg Gossler & Co. KG, according to the statement.