FRANKFURT (Reuters) - German metals recycling group Befesa is planning to list on the Frankfurt stock market this year, the company said in a statement on Friday.
Befesa, which controls almost half of Europe’s steel dust recycling market, is expected to be valued at 1.3-1.6 billion euros ($1.5-1.9 billion) excluding debt in a late-October float, people close to the matter said.
“The planned offering will consist exclusively of existing shares from current shareholder Triton and will allow for sufficient free float,” Befesa said, adding that Triton will remain “significantly invested” after the IPO.
Befesa, which did not give details of the planned size of the offering, plans to pay out 40-50 percent of net earnings to investors after the planned IPO.
Befesa collects steel dust from so-called mini-mills that melt scrap to produce new steel.
While it gets fees for accepting the hazardous waste, it generates up to 90 percent of sales at its steel unit by selling zinc it extracts from the steel dust to companies like Glencore (GLEN.L), Nyrstar (NYR.BR) or Korea Zinc (010130.KS).
Triton earlier this year had also launched a parallel sales process for Befesa that attracted bids from private equity groups such as CVC [CVC.UL], but opted to market the group to potential IPO investors in hope for a higher valuation.
In the twelve months to end June, Befesa posted group adjusted earnings before interest, tax (EBIT) of 133 million euros on sales of 685 million euros.
It had net debt of 465 million euros as of end-June and is hoping to reap a valuation including debt similar to that of peers.
Companies with comparable activities — including Waste Connections (WCN.TO), Stericycle (SRCL.O), US Ecology (ECOL.O), Umicore (UMI.BR) and Ecolab (ECL.N) — trade at 10-14 times their expected core earnings.
Befesa was listed in Spain from 1998 to 2011. Spain’s Abengoa bought a controlling stake in 2000 and later squeezed out minorities. It sold the company on to Triton in 2013 for 850 million euros in cash, or 1.1 billion euros including debt.
Citigroup, Goldman Sachs International and J.P. Morgan are acting as joint global coordinators and bookrunners on the Offering. Berenberg, Commerzbank, Santander and Stifel are acting as additional joint bookrunners.
Reporting by Arno Schuezte; Additional reporting by Claire Ruckin; Writing by Victoria Bryan; editing by Michael Shields and Alexander Smith