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3i banks 5.5x on Norma IPO

The private equity firm has partially exited its holding in Norma Group, which raised more than €386m in its IPO on the Frankfurt Stock Exchange.

UK-listed private equity house 3i Group has reaped a 5.5x return following the flotation of portfolio company Norma Group on the Frankfurt Stock Exchange. The return is based on its share of the proceeds from the IPO, together with the value of its outstanding stake in the business, which it is set to hold for at least another six months.

It is the biggest private equity-backed IPO in Germany since BC Partners floated chemicals company Brenntag in March last year. It is also the fifth largest private equity-backed IPO in Europe over the last 12 months, according to data provider Dealogic.

Norma Group, which manufacturers engineered joining products, listed 18.4 million shares at €21 a share, raising €386.4 million. The offering consisted of 7 million new shares as a result of a capital increase, 9 million from current shareholders, including 3i, and about 2.4 million on offer to cover a greenshoe option.

The list price, at the lower end of the €19 to €24 a share subscription range, gave the business a market capitalisation of €669 million. The flotation was heavily oversubscribed, 3i Group said.

The successful IPO came as it emerged two other private equity firms, CCMP Capital Advisors and Unitas Capital, pulled the flotation of their portfolio compolio business Edwards, citing market uncertainty. The Edwards IPO had been expected to raise up to £447 million according to press reports.

Norma is a very robust business, with great geographic diversification and customer base.

Ulf von Haacke


3i, which built Norma through organic growth and acquisition since its 2006 buyout of Rasmussen Group, has reduced its holding in the company from 73 percent to 31 percent following the IPO. 

Commerzbank, Goldman Sachs and Deutsche Bank were joint bookrunners on the flotation, with Rothschild acting as IPO advisor and Dechert providing legal advice.

3i said in a statement that Norma would use the proceeds from the listing to pay down debt and strengthen its financial flexibility to allow it to pursue further organic and acquisition growth.

Ulf von Haacke, a partner and managing director at 3i’s German office, said: “We acknowledge this is a very difficult environment in which to list a business – we began our investor education process the day after the Japanese tsunami, for example. But Norma is a very robust business, with great geographic diversification and customer base. A multi-stage exit made perfect sense to us, and allows us to maintain exposure to the company’s ongoing growth. Following a lock-up period of six months, we will consider our options with regard to future sales.”

Ulf van Haacke



3i acquired Rasmussen in 2006, before merging it six months later with existing Swedish portfolio company ABA. It later acquired and bolted-on US businesses Breeze and R.G. Ray to further enlarge its international footprint.

3i introduced a new senior management team to the business, and managed to more than double its earnings before interest, tax, depreciation and amortisation margins. Von Haacke said they went into restructuring mode and reduced costs “very quickly” during the economic crisis, reducing the company’s headcount from 3600 people to 2600, helping it to weather the downturn.

“Norma is now growing back to its original size [in employee terms] but we’re using the recovery to rebalance its footprint and make sure its structure is appropriate to its key markets,” von Haacke said.

In financial year 2010, Norma generated around €490 million in revenue, approximately 49 percent above its 2009 earnings of €330 million.