ISS Shares Advance in Denmark’s Biggest IPO in Two Decades

Photographer: Freya Ingrid Morales/Bloomberg

An employee of ISS A/S, the world's largest cleaning services company, prepares to clean the hallway of an office building in Copenhagen. Close

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Photographer: Freya Ingrid Morales/Bloomberg

An employee of ISS A/S, the world's largest cleaning services company, prepares to clean the hallway of an office building in Copenhagen.

ISS Holding A/S, the world’s largest cleaning company, jumped as much as 13 percent in its first day of trading in Denmark’s biggest initial public offering in 20 years.

ISS’s new shares traded as high as 180 kroner in Copenhagen, compared with the IPO price of 160 kroner. The initial price range set during the offer was 140 kroner to 175 kroner. ISS said it raised gross proceeds of 8.04 billion kroner ($1.5 billion).

The sale of ISS, whose owners include Goldman Sachs Capital Partners and EQT Partners AB, will be the largest IPO in Denmark since the 1994 listing of TDC A/S. Companies in Europe raised $10 billion from listings so far this year, about three times the amount in the same period in 2013, as investors bet on an economic recovery.

“ISS’s defensive business model gives new investors the prospect of stable growth, stable earnings, a good cash-flow and very solid dividends,” Soeren Loentoft Hansen, an analyst with Aabenraa, Denmark-based Sydbank A/S, said in a note. He’s starting coverage of ISS with a buy recommendation, and sees room for the shares to advance as much as 25 percent from the IPO price.

Existing Shares

ISS’s new stock traded at 179.3 kroner at 9:59 a.m. in Copenhagen with 4.09 million shares traded.

In addition to the 50.2 million new shares sold by ISS, Goldman Sachs and EQT will sell 1 million existing shares. ISS will have a market value of about 29.6 billion kroner, excluding the value of treasury shares held by the company.

“We have received very positive feedback from investors,” ISS Chief Executive Officer Jeff Gravenhorstsaid in today’s statement.

U.K. retailers Poundland Group Plc and Pets at Home Ltd. began trading yesterday after closing their sales early because of high demand from investors. Poundland gained 23 percent, and Pets at Home fell about 3 percent.

ISS said about 10 percent of its shares were allocated to Danish retail investors while the rest went to institutional investors.

ISS, based in Soeborg, Denmark, said on Feb. 18 it would raise 8 billion kroner to repay debt. The company said on March 11 it would close the share sale early after receiving strong demand.

The company, which has more than 530,000 employees, offers facility management services in more than 50 countries.

ISS pulled an IPO in March 2011, citing market uncertainty. Later that year, G4S Plc said it abandoned a takeover pursuit of ISS after the security services provider’s shareholders revolted.

Nordea Bank AB, Goldman Sachs Group Inc. and UBS AG are sale managers. Lazard is acting as financial adviser to ISS.

To contact the reporters on this story: Ruth David in London at rdavid9@bloomberg.net; Christian Wienberg in Copenhagen at cwienberg@bloomberg.net

To contact the editors responsible for this story: Tasneem Brogger at tbrogger@bloomberg.net; Aaron Kirchfeld at akirchfeld@bloomberg.net

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