Medica To Begin IPO Road Show Next Week

LONDON (Reuters) – French care homes group Medica is set to kick off a series of initial public offerings by private-equity owners this year, people familiar with the deal said on Friday.

Medica, which provides accommodation for old people requiring long-term care, will start talking next week to potential investors for its IPO. It aims to raise at least 250 million euros ($358 million), the sources said.

Bookrunners BNP Paribas (BNPP.PA), Credit Suisse (CSGN.VX) and Royal Bank of Scotland (RBS.L) will start bookbuilding in the week of Jan. 25. Listing is expected around the Feb. 8 week.

A Paris listing would rank Medica alongside competitors including Orpea Sa (ORP.PA) and Korian SA (KORI.PA).

Medica’s IPO proceeds from selling new shares will go to cutting debt and funding its expansion.

AXA Private Equity (AXAF.PA) and BC Partners may also reduce their holdings by selling existing shares, depending on how the IPO is being received.

Medica has waivers from lenders to deleverage the company and start paying dividends, and for BC Partners to drop its stake below 50 percent. The company plans to achieve a free float of 25 percent, sources said.

BC Partners led the acquisition of Medica from private equity firm Bridgepoint in 2006 for about 750 million euros.

Bankers have previously said the IPO proceeds would pay off 185 million euros in mezzanine and term loans, helping reduce the Medica’s leverage ratio to around 4 to 4.5 times debt to earnings before interest, tax, depreciation and amortisation (EBITDA) from 7.3 times, according to Reuters LPC. (Reporting by Daisy Ku; Editing by Erica Billingham and Dan Lalor) ($1 = 0.6983 euro)