July 19, 2017 / 5:22 PM / 2 years ago

Exclusive: Swiss payment firm Global Blue to hire banks for 2018 listing - sources

HONG KONG/LONDON (Reuters) - The owners of shopping tax-refund firm Global Blue have held talks with investment banks over the past two days to choose advisers for a possible share sale next year, sources familiar with the matter told Reuters.

Customers carry shopping bags with purchases outside a department store in Paris, France, February 26, 2016. REUTERS/Charles Platiau

Silver Lake, which has controlled Global Blue since 2012, is expected to select banks later this year with a view to floating the business in the first half of next year, the sources said.

Several banks have pitched for an initial public offering (IPO) mandate at Silver Lake’s London offices this week, the sources said, adding the process was still at an early stage.

Silver Lake would expect an IPO to value Global Blue at more than 4 billion euros ($4.6 billion), sources close to the firm said.

Reuters reported last year that Silver Lake and Partners Group, which has a minority stake in the business, had started sounding out possible bidders and had signed non-disclosure agreements with a series of interested parties.

Now, the sources said, Silver Lake is looking to press ahead with an IPO in the first half of 2018 but has yet to decide where to list the company.

The U.S. buyout fund sees an IPO as its preferred option, the sources said. It has no plans to launch a sales process, said one of them. A sale of the company would fetch up to 3 billion euros ($3.46 billion), bankers have said.

Global Blue serves tourists who buy luxury goods while abroad. It has been backed by private equity investors for the past nine years, with Silver Lake and Partners Group being the latest funds to come onboard in 2012.

The business relies on Chinese, Middle Eastern and Russian tourists who use its network to purchase goods tax free, and as such has drawn interest from Asian buyers seeking access to European markets, the sources said.

Chinese conglomerate HNA Group is one of the interested parties evaluating the business, which operates in 51 countries across the world and employs about 1,800 people, another source said.

HNA, which declined to comment for this story, bought 16.79 percent of Swiss airport duty-free retailer Dufry AG (DUFN.S) in April and remains interested in scouting out assets that cater to the growing number of Chinese traveling overseas, sources familiar with the company said.

Private equity funds, including Warburg Pincus, have also looked at Global Blue, the sources said. Warburg Pincus declined to comment.

Silver Lake has not engaged in any direct talks with HNA or Warburg Pincus, the sources close to Silver Lake said.

Global Blue reported 115 million euros in earnings before interest, taxes, depreciation and amortization (EBITDA) in the year ending March 2015, representing a 13 percent drop on the previous year, a report by Moody’s Investors Service said.

In a more recent February 2017 ratings update, Moody’s noted the company had a strong operating performance, with net revenues up 3 percent in first nine months to 31 December 2016 and EBITDA up 14 percent during the same period.

In a statement last year, the company said 2016 was a “turbulent year for the tax-free shopping industry” due to factors such as militant attacks and currency fluctuations.

Without disclosing any financial figure, the statement said Global Blue’s tax-free shopping sales were hit hard at the start of the year but stabilized in the last quarter of 2016, growing 3 percent in December.

Additional reporting by Julie Zhu in Hong Kong and Gregory Roumeliotis in New York; Editing by Rachel Armstrong and Jane Merriman

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