Derby Cycle considers Frankfurt listing

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Germany’s feeble IPO market could get into gear with a listing by the country’s leading bicycle maker by sales, after Derby Cycle said it wanted to list on the Frankfurt stock exchange.

The northern German group, which owns four bicycle marques and produces Britain’s Raleigh brand under licence, said it aimed to launch an initial public offering in the near future.

The company has hired Equinet, BHF and MM Warburg as banking advisors and could float within the first quarter, people close to the situation said.

“We are already well prepared for a possible IPO and can start the process soon given favourable underlying conditions,” said Mathias Seidler, Derby’s chief executive.

Derby may begin a new cycle of possible listings in the Frankfurt stock market, potentially ending last year’s IPO drought triggered by the eurozone debt crisis. In the past year, only eight companies made their way to the main board of the Frankfurt stock exchange, raising €2.5bn ($3.28bn).

This year, a handful of medium-sized companies are already considering public offerings.

Tui, the German travel group, said last month it was preparing the flotation of its Hapag-Lloyd shipping line, in what could be this year’s largest IPO in Germany.

Hochtief, the German construction group that in past months tried to fend off a hostile bid by Spanish rival ACS, said last November it would resurrect its plan to dispose of its infrastructure business. Hochtief had pulled the plug on the flotation in late 2009 amid a lack of interest.

British private equity group 3i Group is also preparing a more than €800m initial public offering of Norma, a vehicle clamp maker, for mid-2011.

Derby Cycle, which is owned by management and Finatem, a German private equity group, said it aimed to use the proceeds from the IPO to boost its international sales of traditional and electric bikes.

Derby currently has a strong focus on Germany. Only 27 per cent of the €173m revenues reported in its most recent financial year were from abroad, mostly European countries. The company earned €12m before interest and tax.

The company said it hoped to benefit from the strong demand for electric bikes, a new market segment in cycling.

ZIV, the German bicycle association, estimated that electric bike sales in Europe jumped from 500,000 in 2009 to more than 600,000 last year.

Derby sold 50,000 electric bikes in 2010, giving it a market share of more than 20 per cent in Germany.

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