Terra Firma Joins Blackstone in Cashing in on Europe IPOs
Guy Hands’s Terra Firma Capital Partners Ltd. and Blackstone Group LP (BX) are joining a growing list of private-equity firms that are making this the busiest year for U.K. initial public offerings since at least 2010.
Terra Firma, the Guernsey, Channel Islands-based firm, has begun an IPO of U.K. wind-power generator Infinis Plc that will value the company at 1.5 billion pounds ($2.4 billion) including debt. Blackstone is leading a sale of part of its stake in Merlin Entertainments Group Ltd., the owner of Madame Tussauds and the London Eye.
Issuers in the U.K. have announced more than 70 IPOs this year, the most since at least 2010, when 84 companies disclosed plans to go public, according to data compiled by Bloomberg. IPOs in Europe raised about $17 billion this year, the data show, compared with $10 billion in the same period in 2012 as the benchmark FTSE 100 has gained 12.4 percent and buyout firms have re-entered the market.
“Sponsors have seen a series of transactions not just get done, but get done well over the course of 2013,” said Adam Young, head of equity advisory at Rothschild in London. “They are now confident of there being a wide enough window to trade if they push the button.”
Investors have snapped up shares of companies including Foxtons Ltd. (FOXT), the London-based estate agent BC Partners Ltd. took public in September, and HellermannTyton Group Plc (HTY), a maker of cable ties and fasteners owned by Doughty Hanson & Co. Foxtons has gained about 25 percent and HellermannTyton has risen 42 percent since its shares began trading in March.
Terra Firma plans to seek to value Infinis at about 1.5 billion pounds including debt, said two people with knowledge of the deal who asked not to be identified as the details are private. Infinis plans to offer a dividend of 55 million pounds in the year ending March 2015, its first full financial year following the IPO, the company said today in a statement.
Blackstone, CVC Capital Partners Ltd. and Lego Group owner Kirkbi A/S expect to sell part of their stakes in Merlin’s IPO, according to a statement. At least 20 percent of the shares will be publicly traded after listing.
“The IPO market is now definitely open for European sponsors, though for how long is anyone’s guess,” said Mark Dighero, a partner at London-based law firm Allen & Overy LLP who advises private-equity firms.
Other private-equity backed companies planning to go public in 2014 include Copenhagen-based ISS A/S. The provider of contract cleaning staff, which is owned by Goldman Sachs Group Inc.’s leveraged-buyout unit and Sweden’s EQT Partners AB, this month appointed advisers for an IPO, Sky News reported.
“IPO windows tend to be short and unpredictable,” said Michael Abraham, co-head of the Financial Sponsors Group for Europe, the Middle East and Africa at investment bank UBS AG. “So if you want to hit the window, and we have one right now, you need to prepare thoroughly beforehand.”
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