Danish services firm ISS revives share float plan to raise $1.5 bln

Reuters - UK Focus

* Denmark's ISS aims to be listed on Copenhagen StockExchange

* Nordea, Goldman Sachs (NYSE: GS-PB - news) and UBS (Xetra: UB0BL6 - news) will be joint globalcoordinators

By Ole Mikkelsen

COPENHAGEN, Feb 18 (Reuters) - Danish business services firmISS is planning a return to the Copenhagen stockmarket with an initial public offer aimed at raising 8 billioncrowns ($1.47 billion)for the company, its third attempt at anIPO since it was bought by private equity investors nine yearsago.

The proceeds will be used to bring down the company's netdebt, which stood at 22.7 billion crowns ($4.2 billion) at theend of 2013, and will make it the second biggest IPO in theNordics since Norwegian insurer Gjensidige Forsikring (Other OTC: GJNSY - news) raised $1.87 billion in 2010.

Funds managed by Swedish private equity firm EQT (Frankfurt: EQ6.F - news) and byGoldman Sachs bought ISS for 22.1 billion Danish crowns($4.05 billion) and delisted it from the Copenhagen bourse in2005.

ISS said a partial sell-down of their shares was expectedunder the IPO but did not quantify their intentions.

EQT and Goldman Sachs together hold 73 percent of ISS afterthe Ontario Teachers' Pension Plan (OTTP) and KIRKBI, whichinvests funds from the family behind Lego toys, injected 500million euros ($685 million) for a combined 26 percent stake in2012. Neither of these investors intends to sell shares in theIPO, ISS said.

"The intended IPO is expected to support our operationalstrategy, advance our public and commercial profile provide uswith improved access to public capital markets and a diversifiedbase of new private and institutional shareholders," ChiefExcecutive Jeff Gravenhorst said.

The company also said on Tuesday its earnings beforeinterest, taxes, depreciation and amortisation were unchangedlast year at 5 billion crowns on revenue down 1.3 percent at 78.5 billion crowns, due to non-core divestments and adverseexchange rates, with underlying organic growth running at 4.3percent.

PREVIOUS ATTEMPTS

Plans to list ISS in 2007 and again in 2011 were bothdropped because of difficult market conditions.

The company cancelled the IPO in 2011 six days after the devastating Tohoku earthquake off Japan brought reneweduncertainty and volatility to global financial markets.

An agreed 5.2 billion-pound ($8.69 billion) cash and sharesbid by British security services group G4S (LSE: GFS.L - news) was thenabandoned in November 2011 due to resistance from G4S'sshareholders. At the time the deal had valued the company at 130Danish crowns a share.

"I see a good chance that the IPO will be successful thistime. It is a completely different company and the financialenvironment is different from what we saw in 2011," analystJanne Vincent Kjaer from Jyske Bank (Copenhagen: JYSK.CO - news) said.

Danish pension fund ATP, which ranks among the largestpension investors in Europe with assets worth more than 500billion crowns, said it might be interested in the offer.

"We will take a look and decide if the pricing is attractiveenough to make it interesting for us to participate," head ofequities Claus Wiinblad said.

Peers such as G4S have an enterprise value of around 10times EBITDA according to Thomson Reuters (Frankfurt: TOC.F - news) data, a multiple thatwould value ISS at roughly 50 billion Danish crowns ($9.1billion), including debt.

Share (LSE: SHRE.L - news) analyst Soren Lontoft Hansen from Sydbank (Copenhagen: SYDB.CO - news) estimatesthe enterprise value to be between $8.5 and $9.7 billion.

"We have positive equity market conditions and a lowinterest rate level provides an appetite for equities and thatfuels the IPO market," Lontoft said.

Nordea, Goldman Sachs and UBS Investment Bank have beenappointed to act as global coordinators and as bookrunners alongwith Barclays (LSE: BARC.L - news) and Morgan Stanley (Berlin: DWD.BE - news) , while Carnegie, Danske Bank (Other OTC: DNSKF - news) and SEB (Paris: FR0000121709 - news) have been appointed as Co-lead managers. Lazard isacting as financial advisor.

No date for the offer has been set but Gravenhorst toldreporters on a conference call that the final decision to goahead would be made before the end of March.

View Comments (0)