In a move that will have both investment bankers and private equity investors start to view 2002 with greater optimism, Focus Wickes is today announcing its plan to float on the London Stock Exchange.
The UK's second largest DIY retailer, the company is a result of a buy-and-build strategy by private equity firm Duke Street Capital which owns 55 per cent of the firm. Management own a further 25 per cent. The company said that the target float valuation was between £1.2bn and £1.5bn.
ING Barings are to be joint co-ordinators alongside Goldman Sachs. ING Barings has developed a close relationship with the firm, leading its recent high yield bond offering for example, which was used to refinance the purchase of the Wickes and Great Mills chains.
The Financial Times reports that it is unlikely that there will be a retail allocation in the offering. As one analyst commented: 'this is a familiar name with a good straightforward story: the buyside will be comfortable with this so why go through the heartache of a retail offering?'
With other UK retail names, such as HMV Media, planning to come to the market this year, the firm will want to move swiftly and has said it intends to have completed the listing by the end of July if at all possible.
Many in the market had been aware that a listing was in the pipeline with Duke Street clearly being keen to deliver a strong exit from the business despite the recent pessism about the state of the new issues market. With other private equity firms holding portfolio companies in anticipation of a return of the public equity markets, this transaction is of a size and profile to be treated as a benchmark by many.
Focus Wickes has 427 outlets across the UK and had sales of £1.46bn for 2001 with operating profits of £106m [a more than threefold increase to 2000].