Cinven picks banks for IPO of truck parts maker Jost, say sources-Reuters

(Reuters) Buyout group Cinven has mandated JP Morgan, Deutsche Bank and Commerzbank to organize a stock market listing of its German truck and trailer parts maker Jost Group, three people familiar with the deal said.

An initial public offering may place as early as autumn, they said on Monday.

Any divestment would prove a positive turn for Cinven, which acquired a majority stake in Jost just weeks before the Lehman insolvency in 2008 and had to agree to a restructuring of Jost’s finances in 2010 to avoid a looming insolvency.

After posting heavy losses at the height of the global economic crisis, Jost currently has earnings before interest, taxes, depreciation, and amortization of roughly 75 million euros ($84 million), the sources said.

If valued at a similar multiple as peers like Wabco, SAF Holland and Stabilus – which trade at an average of 10 times their earnings – Jost may reap a valuation of more than 700 million euros in a potential IPO.

Cinven, Jost and the banks declined to comment, except for Commerzbank, which was not immediately available for comment.

Jost struck a deal in 2010 to restructure its finances, avoiding a looming insolvency and cutting its loan burden through a debt-for-equity swap.

Cinven saw its 77 percent stake in the company cut to 64 percent, while Jost’s management retained a stake of more than 23 percent and junior debt holders converted their claims into preferred shares, giving them a 13 percent stake. The deal included a 50 million euro cash injection from Cinven and mezzanine lenders.

Jost has about 2,500 employees and is based in Neu-Isenburg, outside of Frankfurt.