FRANKFURT (Reuters) – Financial investor BC Partners plans to float part of German chemical distributor Brenntag in the first half of 2010, several sources familiar with the situation told Reuters on Tuesday.
The planned placement of up to 1.5 billion euros ($2.2 billion) in old and new shares would be the largest initial public offering in Germany for years and testify to renewed investor thirst in an IPO market parched by the financial crisis.
“Preparations are running at full speed,” said one insider working on the deal.
Investment banks have already been approached and a mandate is likely to be given before the end of the year, the sources said, adding that a capital increase is planned alongside the sale of existing shares in the company.
BC Partners is expected to hold less than 50 percent of Brenntag at the end of the process, the sources said.
The investor has other IPO candidates in its portfolio, such as cable company Unity Media, but valuations are not yet sufficient for a flotation, putting Brenntag in the lead in the race to come to market, one person familiar with the plans said.
BC Partners bought the chemical distributor for more than 3 billion euros in 2006.
Brenntag’s sales rose to more than 7.4 billion euros in 2008 from 5.3 billlion at the time of the purchase, the company’s Internet site shows.
The credit crisis has made it difficult for private equity investors to get financing from banks to fund takeovers, depressing the secondary buyout market, in which private equity firms sell companies in their portfolio to other private equity players.
As a result, private equity firms are increasingly looking to initial public offerings to make good on their investments, encouraged by the recovery in stock markets.
Investment bankers are predicting billion-euro IPOs will debut in the first half of next year.