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Permira hires Rothschild on Madrid float of fast-food chain Telepizza, say sources: Reuters

Private equity group Permira is working with Rothschild on a stock market listing of its Spanish fast-food chain Telepizza as it banks on Spain’s economic recovery to cash out, two sources familiar with the matter said.

An initial public offering (IPO) could take place before or after the summer next year, one of the sources said, pointing to May or September as likely IPO windows.

The company, which was trading on the Spanish stock market for a decade until Permira took it private in 2006, has been struggling in recent years due to a prolonged downturn in Spain and a slowdown in consumer spending.

Its net debt of 575 million euros ($627.4 million) was refinanced last year and currently stands at 230 million euros, the source said, while adding that Telepizza’s debt pile is no longer a matter of concern.

Spokesmen at Telepizza and Permira declined to comment while Rothschild was not immediately available for comment.

The business, which serves pizza and burgers in 643 stores across Spain, made around 60 million euros in core earnings in 2014 with net debt representing four times its earnings before interest, taxes, depreciation, and amortisation (EBITDA), the source said.

London-based Permira teamed up with the Ballvé family and its non-executive chairman Pedro Ballvé when it secured control of Telepizza for 962 million euros in 2006.

After last year’s refinancing, it owns around 51 percent of the company alongside the Ballvé family while U.S. investment firm KKR and other former lenders have the remaining 49 percent.

ECONOMIC REBOUND
Permira wants to make the most of a pick-up in the Spanish economy to whet investors’ appetite for some of its portfolio companies including Spanish clothing retailer Cortefiel which is also in the process of being sold.

Spain’s economy grew at its fastest rate since 2007 in the second quarter of the year with unemployment falling to 21.2 percent in October from a peak of 26.9 percent in 2013 and a recovery in consumer spending underpinning growth.

But international investors remain in wait-and-see mode due to the general election in December and deals are unlikely to happen until there’s more clarity on the new government.

Headquartered in San Sebastian de Los Reyes, on the outskirts of Madrid, Telepizza was launched in 1986 by Cuban entrepreneur Leopoldo Fernández Pujals, former chairman of Jazztel.

It runs 654 international stores in Portugal, Peru, Chile and Poland among other countries.