Exponent readies Trainline for first 2015 IPO

The IPO is expected to value the online rail ticket retailer at around £500m

Trainline, the British online rail booking system partly owned by Exponent Private Equity, has announced plans to launch an initial public offering that would value the company at around £500 million (€638 million, $756 million).

In its announcement, Trainline said the gross proceeds payable to the company from the share offer is expected to be around £75 million. This will be used to pay off existing debt and settled bank costs and fees, the company said.

Exponent and its coinvestors, HarbourVest Partners and Northwestern Mutual Life Assurance, will all sell shares in the sale, which will result in a free float of at least 25 percent.

Morgan Stanley and JP Morgan Cazenove are acting as joint global co-ordinators, and the pair are joined by Numis Securities as joint bookrunners.

The size of Exponent’s stake following the IPO is unclear. Exponent declined to comment on the proposed transaction.

Exponent acquired Trainline in 2006 for £163 million (€238 million; $300 million) from a consortium of shareholders that included Virgin, Stagecoach and National Express transport groups, Private Equity International reported at the time. The firm made the investment from its debut £400 million fund, a 2004-vintage.

Trainline was launched in 1999 to sell rail tickets through the internet and call-centres. In 2004 the firm acquired its rival QJump from National Express Group. According to the IPO announcement net ticket sales have increase from around £71.1 million in 2004 to £978.1 million in 2014, and total transactions have increased from 1.4 million in 2004 to 14 million in 2014.

For the twelve months ending 8 November 2014 Trainline’s website and mobile apps received an average of 20.8 million visits per month. Since their launch the company’s mobile apps have reached 7.4 million downloads.

Exponent will be keen to return capital to investors as it continues to raise its third buyout fund. The vehicle, which is targeting £800 million (€1.01 billion; $1.3 billion) and has a £1 billion hard-cap, held a first close of around £500 million at the end of last year.

In October 2013 Exponent sold its majority stake in The Ambassador Theatre Group to Providence Equity Partners in a deal that valued the business at £350 million and netted the firm a 5.2x return. A year later the firm sold Gorkana Group to Chicago-based private equity firm GTCR for around £200 million.