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Last updated: November 4, 2013 10:50 pm
Infinis, the UK renewable power company owned by Guy Hands’ private equity group Terra Firma, has given details of a planned flotation that will value the group at as much as £930m.
The move is the latest example of a private equity-backed company seeking to tap markets that have been buoyed by signs of economic recovery in Europe and last month’s deal on the US government’s debt ceiling.
Last week, Merlin Entertainment, the owner of Madame Tussauds waxworks, which said that it planned to raise up to £800m in an initial public offering that will value the Blackstone-backed theme park operator at up to £3.34bn.
Infinis, which announced its intention to float two weeks ago, said on Monday that it would offer ordinary shares at between 260p and 310p each, implying a market capitalisation of between £780m and £930m.
The offering will consist of 90m-120m of existing shares sold by Monterey Capital II, the vehicle holding Terra Firma’s shares. This should result in a free float of between 30 and 40 per cent of the company’s equity – excluding an overallotment arrangement that could bring it to as much as 46 per cent.
The shares are scheduled to make their market debut on the London Stock Exchange on November 15.
Terra Firma is expected to raise between £234m to £428m from the Infinis sale, having made an initial equity investment in the business of €61m in 2003.
The private equity group has been seeking to return cash to its investors as it attempts to raise a €3bn green energy infrastructure fund – its biggest fundraising effort since it lost a £1.75bn stake in EMI two years ago, following the seizure of the music company by its lender Citigroup.
Infinis was spun off from Waste Recycling Group – a waste disposal company that Terra Firma bought for €857 in 2003 and sold three years later.
The business, which has 360 employees, reported revenues of £226m for the 12 months to March 2013. It owns a portfolio of 147 power generating plants across the UK, including gas generators and an onshore wind operation.
Earnings before interest, taxation, depreciation and amortisation increased to £125m in the last full year, from £100m in 2011. Barclays, RBC and Deutsche Bank are joint bookrunners.
The list of private equity-backed businesses seeking a London IPO has been growing in recent months, largely as US institutional investors seek to increase their exposure to Europe after cutting it at the height of the eurozone debt crisis.
Among the IPO hopefuls are Poundland, the discount retailer owned by Warburg Pincus which recently appointed Rothschild to work on plans for a listing next year.
UK insurer and travel specialist Saga, backed by CVC Capital Partners, Permira and Charterhouse, is also working on a flotation, according to people familiar with the company.
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