Revus delivers total exit for 3i and Energivekst

The IPO of Norwegian specialist oil company Revus was priced over the weekend of June 25–26. The company received strong support, with the result that it increased the price range and potential number of shares in the deal last week.

Despite the increases, Revus still built a book more than 10 times covered. The high level of demand meant that selling private equity firms that had planned only to reduce their shareholdings were able to exit fully, ensuring that the IPO placed 83.3% of the company. The deal ended up at NKr1.16bn (US$177m).

The top end of both ranges was moved to take the maximum size to more than NKr1.1bn from NKr717.6m. Enskilda Securities and First Securities were joint bookrunners. The original price range of NKr34–NKr39 was revised to NKr34–NKr42 and the secondary deal size from 4.6m–11m shares to 4.6m–18m shares. On top of this, the company was selling 6.4m–7.4m primary shares, dependent on where the offer was priced.

The move in the secondary portion stemmed from private equity sellers 3i and Energivekst increasing the amount they were willing to sell. Management made no change and sold a combined 0.6m–1.2m shares, which is approximately 10%–20% of their holdings.

Subscriptions to the offer built well throughout the bookbuilding period, aided by peers trading up. PA Resources (PAR) entering the Norwegian Continental Shelf by taking a 10% stake in the Volve field boosted the sector. PAR also successfully completed an NKr612.5m (US$93.5m) accelerated capital increase on June 23 through Carnegie.

Revus sought to raise approximately NKr250m (US$38.2m) and was set to issue 6.4m–7.4m new shares, depending on where the offer priced in the original NKr34–NKr39 price range. The top end of the range was adjusted to NKr42, where the offer was priced, allowing the company to issue just 6m shares to raise NKr252m.

Joint bookrunners Enskilda Securities and First Securities were able to expand the secondary offer significantly in light of the smaller primary portion and levels of oversubscription. Initially, private equity sellers 3i and Energivekst would have retained more than half their holdings but investors said they would pay more for a greater number of shares. This led to the revised price range and the complete exit of both firms.

The result was a total offer of 27.6m shares at NKr42 to raise NKr1.16bn for 83.3% of the company, giving an indicative market cap of NKr1.39bn (US$176.9m).

The book was dominated by domestic investors, with local institutions taking 27% of the deal and retail a further 5%.

UK, US and German-speaking investors were significant among the rest of the book. The stock traded up on its first day on June 27 to close at NKr44 and ended at NKr46 on June 30.

Elsewhere on the exit front, 3i sold its minority stake in Zenith, one of the UK’s largest independent vehicle leasing companies. The stake was sold to Dunedin Capital Partners in a deal worth £27m.  3i originally backed the MBO of Leeds-based Zenith in February 2004, when it invested £6.5m in the company.  3i will receive proceeds of £12m and will generate an IRR of 80% on the investment. Phil Greves, 3i investment director, said: “ Since our investment, the company has seen strong growth and has recently won major new contracts with BUPA and Remploy”.