As we enter 2007, the public markets are already seeing their fair share of private equity activity. Integrated telecom company Outremer Telecom began pre-marketing last week ahead of its planned €100m–€200m IPO. Lead managers Lazard-Natixis and SG expect pan-European roadshows to get under way later this week, with price guidance expected to be announced today (January 18). The deal should be priced towards the end of the month.
The transaction will consist of primary and secondary shares, with the company’s biggest shareholder, Apax Partners, looking to reduce the 60% stake that it acquired in January 2006 for €70m. The remaining shares are held by company management (29%) and founding investors, which represent the remaining 11%.
One of the world’s largest packaging groups, Dublin-based Smurfit Kappa, confirmed last week that it was considering an IPO later in the year. The company would need to gain approval from its lenders to change the terms of its credit facilities before it could go ahead. Some bankers believe the deal is likely to come in the first quarter and could be of the order of €1.1bn–€1.4bn.
Madison Dearborn Partners, the private equity owners of Jefferson Smurfit held a 58.3% stake in the merged entity while Kappa owners Cinven and CVC Capital Partners held a 41.7% stake.
At the same time, Blackstone has persuaded advisers to nursing home operator Southern Cross Healthcare to allow it to reduce its stake in the company, less than six months after it was floated.
At the time of the flotation, Blackstone had agreed not to sell its remaining shares for at least six months. Southern Cross was forced to delay the float for a month last June because of choppy market conditions. Eventually the group joined the London market on July 12 after Blackstone raised £200m (US$392m) at the reduced price of 225p a share.
That left the investor with a 48% stake in Southern Cross. Since then, the shares have risen and brokers Morgan Stanley and UBS have placed a further 21.3% of Blackstone’s Southern Cross shares at 318.75p raising €193.6m. Blackstone has agreed not to sell any further shares until early March.