Swedish Refrigerator Maker Dometic AB Starts IPO
Dec 3, 2003
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Swedish specialty refrigerator maker Dometic AB will start trading Dec. 3 on the Stockholm stock exchange, seeking to raise up to 4.3 billion Swedish kronor (U.S. $570 million).
Dometic's initial public offering would provide a quick exit for Nordic buyout firm EQT Partners AB. The flotation is the first in Sweden since heating equipment maker Alfa Laval AB raised Skr5.6 billion in May 2002 and is seen as a key test of a possible revival in the Nordic IPO market. In 2002, there were five Nordic IPOs worth $900 million, a fraction of the 146 such deals throughout all of Europe that raised $16 billion.
Dometic's offering is made up of 15.7 million shares, representing 51.3 percent of the company's capital. EQT is selling 10 million shares, and 5.7 million are new. The per-share price range is between Skr190 and Skr240, which would give the company a market capitalization of Skr5.8 billion to Skr7.3 billion. There is also a greenshoe option that would increase the offer size by 15 percent if demand is adequate.
Enskilda Securities and Merrill Lynch & Co. are joint global coordinators of the share sale, while Deutsche Bank AG and Svenska Handelsbanken AB are co-leads.
EQT acquired Dometic, a market leader in supplying refrigeration units for recreational vehicles, boats, and hotel minibars, from household appliances group Electrolux AB in 2001. At that time, industry sources said EQT probably paid a figure close to the unit's 2002 sales of Skr4.2 billion.
However, EQT partner Hakan Johansson said that the sale price was higher, although he declined to give a specific price.
Mr. Johansson also said that his firm had originally expected to take Dometic public in 3 to 5 years, but, he said: "The development of the company has gone faster than we anticipated from the start. And the advice we were given is that there has been a demand for equities. The company was ready [to list], and we want to support it with a listing of new shares to develop their strategy."
Dometic will use the money raised from the IPO to pay off debt and go for growth following the conclusion of the company's rebranding strategy to separate Dometic from its former parent company.
"This will give the company a healthy balance sheet and the ability to grow organically and through acquisitions," Mr. Johansson said.
Dometic had sales of Skr6.38 billion in 2002, an increase of 12 percent from the previous year. More than one-half of its sales are in North America and South America, with most of the rest in Europe.
Market watchers, however, said the company's IPO is attracting only mild interest because it may be priced on the high side.
"There's not too much talk about it," said Björn Enarson, an analyst with D. Carnegie & Co. AB. "The discount is not as great as you should perhaps expect when you invest in a new company you don't know very much about," he said. "But if it would be in the low range [Skr190 to SKkr210], then it would be valued in line with the sector."
Mr. Enarson said a price of Skr215 would be a premium of 2 percent. Although that is the sector average adjusted for 2004, Enarson observed that Swedish investors may be turned off by the low premium. (The Daily Deal)
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