Carlyle’s Applus sets IPO price

Based on the listing price, the Spanish testing business is valued at €1.9 billion.

Applus+ Services, a Barcelona-based testing and inspection business owned by The Carlyle Group, has set its price to list on the Madrid stock exchange at €14.50 per share, giving the company a market capitalisation of €1.9 billion, according to a statement.

The share price is within the range of €13.25 and €16.25 indicated earlier, and represents an enterprise value of approximately €2.6 billion, according to a source familiar with the matter. The shares will start trading on Friday on four Spanish stock exchanges, the source added.

Applus+ provides regulatory-driven services and solutions for the energy, industrial, infrastructure and automotive sectors and operates in more than 60 countries.

Applus+ aims to raise approximately €300 million from the public offering, which will mainly be used to reduce the group’s debt and transaction costs associated with the IPO, it said last month. Applus+ generated €1.6 billion in revenues in 2013.

Carlyle, which owns 68.3 percent of the business, plans to sell about half its stake, according the source said. Carlyle declined to comment beyond the statement.

Investindustrial, which owns 5 percent, also plans to sell down its stake in the listing. Investindustrial did not respond to request for comment at press time.

Whilst preparing the flotation, Carlyle also received bids from Advent International, BC Partners and Cinven, which valued the business at around €2 billion, a source told PEI last month. The firm decided however to stick with the IPO as it believed it would lead to a higher valuation, the source added.

Under Carlyle’s ownership, Applus+ has grown substantially. When Carlyle bought its majority stake in July 2007 for €1.5 billion, the business had revenues of €546 million and a presence in more than 30 countries, PEI reported at the time. The firm made the initial investment using its €5.4 billion Carlyle European Fund III.

Investindustrial invested in the company using its €500 million Fund III. The firm will return approximately €1 billion of capital to LPs this quarter, a source told Private Equity International in March. This will include the proceeds of Avincis, which Investindustrial sold alongside Kohlberg Kravis Roberts for €2 billion at the end of March. Fund III is currently valued at 2x, the source said at the time.

The listing in Spain is a further example of the recovery of the European IPO market as an exit route for private equity. KKR-backed Pets at Home and Warburg Pincus-backed Poundland were listed on the London Stock Exchange in March, while ISS, a Danish facility services company owned by EQT Partners and Goldman Sachs Capital Partners, also recently floated on the NASDAQ OMX Copenhagen stock exchange.