Gestamp to list in €3.7bn Spanish IPO

Car parts maker Gestamp plans to float its shares in Spain in the largest European IPO so far this year.

The business aims to sell at least 25 per cent of its shares according to an intention to float document filed on Monday morning, with an expected valuation of at least €3.7bn.

Its shares will be listed on the Madrid, Barcelona, Bilbao and Valencia stock exchanges in the second quarter of this year.

The offering will be the largest IPO by both market capitalisation and amount raised in Europe so far this year, according to data from Dealogic.

Gestamp makes car components from bodywork to door hinges, and supplies carmakers from Volkswagen to Renault. Last year pre-tax profits rose by 37.7per cent to €348m, while revenues climbed 7.3 per cent to €7.5bn.

While the group’s net debt increased from €1.5bn to €1.6bn, its rising profits meant that the ratio of net debt to core earnings fell fractionally from 1.96 to 1.94.

The business was wholly owned by the Riberas family until last year, when it sold a 12.5 per cent stake to Japan’s Mitsu for €416m, valuing the whole business at €3.3bn.

Due to a rise in last year’s profits, the amount paid by Mitsu for the stake has risen to €466.7m – valuing the whole business at €3.7bn. Employees own around 1.5 per cent of the group.

Mitsu will retain its stake after the IPO, while the Riberas family will keep a controlling shareholding.

Chairman and chief executive Francisco J. Riberas said: “Becoming a public company is the next natural step in our growth trajectory.”

He said floating would allow the group to raise more money while also increasing its profile and ability to attract workers.

“We will maintain our family-owned, long-term culture that has enabled us to become a leading supplier in the automotive sector,” he added.

The business was formed in 1997 from the integration of several smaller metal stampers in Spain to create the country’s largest steel business.

It expanded internationally through acquisitions and now spreads across 21 countries from the US to China and has 95 plants, with a further 10 under construction, with 34,000 staff globally.

Carmakers are striving to make their vehicles less polluting to meet ever-more stringent emissions targets.

Taking out weight, often through changing manufacturing techniques or using lighter materials, is key to this “lightweighting” process, and Gestamp has seen a rise in sales as a result of customers requesting more sophisticated materials.

It also benefitted from increased outsourcing from automakers, as well as increasingly demanding crash safety tests on new cars.

The company was one of the first major automotive parts suppliers to confirm an investment in the UK after the country’s vote to leave the EU.

In September the group confirmed it was investing £70m in a new stamping plant in Cannock in Staffordshire to serve customers that include Jaguar Land Rover and BMW.

Image via Bloomberg