Apax, Permira to launch £400m satellite IPO

Satellite operator Inmarsat Group has announced plans to float on the London Stock Exchange on June 17th in an IPO valuing the company at over £1bn.

The global satellite operator controlled by London-headquartered private equity firms Apax Partners and Permira has announced plans to float on the London Stock Exchange on June 17th.

We aim to pay at least half of the normalised free cash flow generated from our operations in the form of dividends to shareholders.

Andrew Sukawaty, CEO, Inmarsat

Inmarsat said it would sell 164.5 million shares at between 215 and 245 pence each and hopes to raise $690 million ($850 million) from the float. The money raised will be used to pay down debt according to the company.

Current investors in Inmarsat will not be selling down their shareholdings in the group following the IPO, which is subject to the normal 180 day lock-up period, said the group.

Inmarsat chief executive Andrew Sukawaty said in a conference call: “We aim to pay at least half of the normalised free cash flow generated from our operations in the form of dividends to shareholders.”

Apax and Permira acquired a 52 percent stake in Inmarsat in November 2003 for $1.5 billion, beating off competition from Apollo Management and Soros Private Equity.

The flotation, the midpoint of which would value the company at £1.1 billion, is the latest in a wave of significant pre-summer European announcements.

Inmarsat: floating high

Italian food group Marr, which is backed by London-headquartered Barclays Private Equity, has announced the pricing of its IPO, valuing the company at up to €512 million.

Two weeks ago, US buyout firm KKR announced plans for its proposed flotation of German aircraft engine manufacturer MTU on June 6th, which could net KKR in excess of €300 million.

Recent flotations of private equity-owned satellite companies have received mixed receptions, but largely provided profitable exits for their backers.

In May, despite opening below the initial offering range, the $200 million IPO of New Skies Satellites valued Blackstone’s equity stake in the company at almost three times its original investment.

In March, KKR reportedly earned three times its initial investment in PanAmSat, which also priced below its range when the company went public.

The rise in flotations shadows a trend that came to the fore in 2004, which was the best year for IPOs since 2000. Last year 1516 global flotations raised a total of $124 billion (€99 billion), according to the Ernst & Yound Global IPO Survey 2005.