(Reuters) – Cleaning services firm ISS said it was looking into an initial public offering (IPO), as its owners join a long line of private equity firms testing the IPO markets with an eye to selling long-term investments.
Sources told Reuters in July the ISS owners Goldman Sachs Capital Partners (GS.N) and Sweden’s EQT Partner had revived plans for a multi-billion-euro flotation.
“ISS Holding A/S has decided together with its shareholders to initiate a strategic review process, which includes considering an initial public offering,” the firm said in its second-quarter report on Wednesday.
It is the second time the Danish company has formally considered an IPO. In June 2007 it hired banks to conduct a feasibility study, and it comes on the heels of a flotation in Copenhagen by food ingredients maker Chr. Hansen, the bourse’s first major listing in years.
The company has appointed Goldman Sachs and Morgan Stanley to assist in the review and Rothschild to act as adviser to ISS and its shareholders.”
The company said it would give further information after the review. ISS Chief Financial Officer Jakob Stausholm declined to give a timetable for the review.
ISS says it is one of the world’s biggest providers of facility services. It employs nearly half a million people in some 50 countries to clean offices, cook school meals, guard buildings and operate call centres.
POSTS Q2 LOSS
Second quarter revenue rose to 18.6 billion crowns ($3.4 billion), from 17.3 billion a year-earlier, narrowing its net loss to 112 million from 673 million the previous year.
“The pick-up in organic growth experienced in the first six months of 2010 is considered sustainable and expected to continue unless macroeconomic factors should turn worse,” the company said.
“Combined with the generally flexible cost base, the extensive restructuring initiatives and the group-wide fixed cost-reduction initiative carried out in 2009, ISS expects its operating margin for 2010 to be slightly above the level realised in 2009.”
Last year’s full-year operating margin was 5.6 percent, and was 5.8 percent in the second quarter of 2010.
ISS said it planned to make only a small number of acquisitions in the short term, mainly in Asia and Latin America.
ISS’s main rivals are British security services group G4S (GFS.L) and catering services provider Compass Group Plc (CPG.L), French catering and services company Sodexho SA (EXHO.PA), and Swedish security services Securitas AB (SECUb.ST). ($1=5.525 Crown)
By Anna Ringstrom and Ole Mikkelsen
(Editing by Jon Loades-Carter and Karen Foster)