PE sellers line up IPOs

The IPO of Eutelsat is well on the way to being revived, with rumours circulating that Goldman Sachs and Morgan Stanley had been given the nod to work on the deal. Lazard is advising the company on the process. By the time that the deal gets under way, however, there will be other banks also working alongside the two main firms. The IPO will follow a similar competitive structure as the recent flotation of Inmarsat, and that of Pages Jaunes last year.

A group of other banks has already been lined up and will be required to submit feedback at various stages, information that will be used to judge their suitability and final roles. The idea of competitive pre-marketing is gaining increasing currency, particularly among VC selling shareholders, who now routinely ask for proposals on that basis.

Eutelsat is owned by Eurazeo, Texas Pacific Group, Spectrum Equity Investors, Cinven and Goldman Sachs Capital Partners, which carried out a €2.25bn recap of the company in April this year. When Eurazeo bought a 23.14% stake in Eutelsat from France Telecom, the deal valued the whole company at €1.93bn.

The IPO of Safilo, an Italian private equity-backed eyewear company, is also gearing up. It is expected to be led by Merrill Lynch, UBM and Banca IMI, although a firm mandate is still to be signed. The deal, which bankers have previously estimated at about €800m based on a €2bn market cap, should be completed before the end of the year. The company is backed by the Tabacchi family and CSFB Private Equity.

Swiss cable company Cablecom has, meanwhile, mandated bookrunners for its proposed IPO. Despite renewed denials of any IPO plans by the company’s chief executive, it has simultaneously appointed CSFB, Goldman Sachs and Morgan Stanley as strategic advisers with an IPO understood to be the target.

The company, which provides telecom and television services, said in a release that its rapid growth had led to interest from financial markets and that it was continuing to monitor possibilities including an IPO, but that “a decision has not yet been taken”.

Growth has been rapid, with digital TV customers tripling since 2001 and hi-speed internet customers increasing more than fourfold in the same period. The company also launched its telephony service last year. The result was total revenues of SFr723m (US$557m) for 2004.

Cablecom has already tapped the financial markets to raise funds following its earlier restructuring. The company went through a debt restructuring in 2003, when it was owned by NTL, leading to Apollo Management, Goldman Sachs Capital Partners and TowerBrook Capital Partners holding a combined 53% holding. Various banks hold the remaining capital.

In 2004 the company refinanced with a bond issue and bank loan totalling SFr1.65bn. In March 2005, it completed a SFr2.175bn-equivalent issue of senior secured floating-rate notes through Deutsche Bank, Goldman Sachs and CSFB to pay off the bank loan.

Leather sofa retailer Land of Leather is to float on the main market in London. The company announced its intention to float last week as it embarked on a significant growth plan. It has appointed Investec as sponsor for the offer, which will comprise primary and secondary stock.

Management and private equity backer SB Capital Europe currently own the company equally. SB Capital is a joint venture between US firm SB Capital Group and Soros Real Estate Partners. The move is designed to diversify ownership and provide stable funding and incentives to staff.

The company has an ambitious growth plan that will see it go from 67 stores to 120 in the next six years, but the cash raised will not be used to finance this. The primary issue will be used to repay shareholder loans, pay staff bonuses and cancel B Shares.

Despite weakness on the UK High Street, Land of Leather has shown a good performance. For the year to April 2005 the company achieved turnover of £156.6m, up 54% on the previous year. Ebita for the same period was £14.4m, an increase of 140%.

Many retailers have issued trading statements during 2005 in light of their poor performance but Land of Leather has continued to buck this trend. Since its April year-end the company has achieved like-for-like sales growth of more than 9%.