• Friday, March 29, 2024
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Swedish buyout group EQT seeks to raise at least € 500m in IPO

Swedish buyout group EQT seeks to raise at least € 500m in IPO

Swedish buyout group EQT announced its intention to seek a stock market listing in Stockholm in a rare recent move from a private equity company to float its shares.

EQT, which was founded by the Wallenberg family of industrialists in 1994 and has grown to become one of Europe’s biggest private equity groups, is seeking to sell about a fifth of its shares in a listing that could value it at about €4bn.

At least €500m in fresh equity will be raised while existing shareholders — Investor, the Wallenberg investment vehicle, owns 23 per cent while EQT’S partners own the rest — will sell down their stakes pro rata.

“We have been growing EQT for the past 25 years as a private company. To strengthen EQT for the long term, it’s time for us to have our own balance sheet so we can invest in our own growth,” chief executive Christian Sinding told the Financial Times.

EQT would become the first private equity company to list for several years after a difficult experience for those few that have already floated.

Mr Sinding told the FT earlier this year that any listing would take place ahead of a looming bear market but he said on Monday that the planned IPO was “not particularly related to the cycle”.

He added: “We’ve had a fairly long bull cycle. So as an investor today you have to be prepared for a certain change in the markets or a downturn.”

Some of the big names in private equity to have listed complain that markets fail to understand buyout groups.

Leon Black, co-founder of listed Apollo, said in June that he “absolutely” had regrets about taking his firm public. “The public market doesn’t understand creatures like us very well,” he added.

Mr Sinding argued that EQT should be “relatively straightforward to understand” compared with other listed private equity firms as it had a normal corporate structure with an independent board, one share one vote and paid a dividend.

EQT had €40bn of assets under management as of the end of June and said they had increased 23 per cent a year since its founding. It added that it expected assets under management for the private equity industry as a whole to increase 10 per cent a year in the future, compared with 15 per cent growth in 2012-16.

Mr Sinding said EQT had “almost built a fort in Europe” and would soon open a new office in France, the only large country on the continent where it did not have much of a presence. It was growing quickly in the US but its main areas for expansion in coming years would be Asia, real estate and growth investments. One of the goals of the IPO is to allow EQT to become a cornerstone investor in its own funds.

He declined to comment on any potential valuation. There will be two weeks of talks with analysts followed by two weeks of a management roadshow before any IPO.

In the first six months of 2019, EQT said its revenues rose by two thirds from a year earlier to €295m, while underlying net profit more than doubled to €110m.

Johan Forssell, Investor’s chief executive, backed the planned IPO: “A listing will provide further opportunities for EQT to grow and develop its successful business model built on industrial value creation. We will remain a long-term owner as we see attractive return potential.”