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Stockholm exchange leads IPO recovery?

Sweden’s IPO market remains Europe’s most promising with two more new additions to the O-list providing welcome exits for private equity investors. Ballingslv International’s flotation provides an exit for EQT and the listing of Nobia returns money to Industri Kapital. It is Industri Kapital’s third IPO on the Stockholm market in the last month. Both companies began trading on June 19 and both manufacture kitchen furniture for the Scandinavian and UK markets.

Industri Kapital acquired Nobia (then Stora Byggprodukter) from Stora in 1996. The company manufactures kitchen interior products including brands such as Marbodal, HTH, Novart, Norema, Poggenpohl and Magnet that are sold directly to consumers and to the construction industry in the UK and Scandinavia. The investment was made from the firm’s 1994 fund. Intermediate Capital Group also provided a SEK150 million mezzanine tranche. A spokesperson for Industri Kapital said it had been a good investment with returns in line with the average for the fund.

Nobia’s offering, priced at SEK78 per share to give the company an enterprise value of SEK4.5 billion, was approximately three times oversubscribed. The total number of shares sold was 19,933,297 or 34.6 per cent of Nobia’s capital. Following the listing Industri Kapital holds 37.7 per cent of the company, reduced from 95 per cent at the time of the original deal and 58 per cent immediately before the IPO. There is a six month lock-up period for these shares. Other selling shareholders were Skanska, which reduced its 20 per cent stake to 13.1 per cent, Norsk Kjkken Invest, which now holds 6.3 per cent, Enodis and ICG. The management team owns 2.6 per cent of the company. Carnegie and Deutsche Bank were joint global co-ordinators and bookrunners for the offering. Enskilda was joint lead manager.

The return on EQT’s investment in Ballingslv was 3.2 times money or an IRR of 33 per cent over four years. The SEK175 million investment was from EQT’s Scandinavia I fund. The six times oversubscribed flotation of Ballingslv valued the company at SEK686 million, thanks to an offering price of SEK64 per share. Due to demand for shares EQT exercised its right to extend the number of shares in the offering from 50 per cent to 65 per cent of the share capital. The investor continues to hold 28.2 per cent of the company’s shares (subject to the over-allotment option) while management retains a 6.8 per cent stake. Alfred Berg was lead manager and bookrunner for Ballingslv, with Nordea Securities as co-lead manager.

Ballingslv International was formed in 1998 from Electrolux-subsidiaries Ballingslv in Sweden, Dansk Formpladeindustri in Denmark and Paula Rosa in the UK. Its products are sold under JKE Design as well as these brand names.