Christian Hansen Said to Price IPO at Close to Bottom

Christian Hansen Holding A/S, a Danish maker of food ingredients, will price its initial public offering at close to the bottom of its initial range, according to two people familiar with the matter.

The Horsholm, Denmark-based company has narrowed the price range for its 55.8 million shares on offer for a second time today to 90 kroner to 92 kroner apiece, raising up to 5.1 billion kroner ($844 million), said the people, who declined to be identified because the information isn’t public. The original price range was 87 kroner to 117 kroner per share.

The book will close at 12 p.m. in London today and the offer is oversubscribed, according to the people. Credit Suisse Group AG of Zurich and New York-based JPMorgan Chase & Co. are managing the sale, along with Morgan Stanley, SEB Enskilda Equities and Danske Markets Equities.

Christian Hansen is pressing ahead with its IPO while worldwide at least 29 companies delayed or canceled equity sales in May as Europe’s debt crisis triggered declines in stock markets. The MSCI World Index, a benchmark gauge for equities in 24 developed nations, has fallen 14 percent from its peak this year on April 15.

“European stocks are dead cheap right now but due to high volatility IPOs will still struggle a bit,” said Herbert Perus, Vienna-based head of global equities at Raiffeisen Capital Management, whose team helps oversee about $36 billion. “The whole world is talking about the euro mess which is clearly overstated. It’s a great opportunity for long-term investors.”

Private Equity

Christian Hansen, which makes natural ingredient solutions such as colors and enzymes, is owned by private-equity firm PAI Partners. The company reported in April that earnings before interest, taxes, depreciation and amortization rose 30 percent to 78 million euros ($95 million) in the six months through February. Revenue in the period totaled 256 million euros.

The company will be valued at 1.6 billion euros to 2 billion euros after the IPO, according to terms of the sale obtained by Bloomberg News. That’s 10.26 times to 12.82 times Ebitda, based on the company’s six-month earnings through February. Companies in the Copenhagen OMX 20 Index have an average price-to-Ebitda ratio of 8, Bloomberg data show.

PAI paid about 1.1 billion euros for Christian Hansen in 2005. It will retain a stake of about 50 percent in the company after the IPO, according to the terms of the offering.

While private equity-led IPOs in Europe stumbled during the first two months of 2010, initial sales from Unterfoehring, Germany-based Kabel Deutschland Holding AG and Brenntag AG of Muelheim, Germany, that were backed by buyout firms in March raised almost twice as much as the biggest U.S. deals of this year, data compiled by Bloomberg show.

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