KKR & Co.-backed German defense supplierHensoldt said it plans an initial public offering in Frankfurt, helping to drive a revival of a market that has lagged behind other European exchanges for most of the year.
KKR plans to sell shares in the IPO, and Hensoldt will sell new stock to raise capital as well, the company said in astatement Tuesday. Hensoldt didn’t specify the size of the offering, which it aims to complete by the end of the year.
KKR is considering seeking a valuation of as much as 3 billion euros ($3.5 billion) and investors may be offered 20% to 30% of Hensoldt through the listing,Bloomberg reported last month. That would make it by far the biggest IPO in Germany this year, where only three companies have gone public this year. Those offerings raised $364 million, a fifth of the proceeds from the same period in 2019, according to data compiled by Bloomberg.
Hensoldt joinsKnaus Tabbert AG, the German maker of camper vans and motor homes, which last week set gears in motion for a Frankfurt IPO. Also slated for this month is industrial conglomerate Siemens AG’s spinoffSiemens Energy. Though no money will be raised in the disposal, Siemens will gradually sell down its stake in the unit over the next 12 to 18 months.
The renaissance is likely to carry on into next year, with SoftBank Group Corp.-backed online used-car marketplaceAuto1 Group GmbH ramping up IPO preparations, Bloomberg reported last month. Siemens is due to spin off another division, its mechanical drive businessFlender, while U.K.-based network provider Vodafone Group Plc is expected to list mobile mast unitVantage Towers in Frankfurt.
Stock market swings and the coronavirus-shaped dent in the global economy have cramped new listing activity for much of this year, but rallying shares have helped reopen the market to companies that have withstood the fallout from virus-induced lockdowns.
The DAX Index has been one of Europe’s best performers this year, slipping 1.1% compared with a 12% drop in the Stoxx Europe 600 Index. Germany’s economic slump has turned out beshallower than in neighboring countries, lending confidence to issuers seeking to go public.
KKRbought Hensoldt, formerly known as Defense Electronics, fromAirbus in 2017. Based in Taufkirchen near Munich, it develops products including radar and optical sensors and systems for surveillance, identification and targeting, according to itswebsite. The company has about 5,500 employees and generated revenue of 1.14 billion euros in 2019.
Bank of America Corp.,JPMorgan Chase & Co.,Deutsche Bank AG and KKR’s capital markets unit are arranging the offering.
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