KKR cuts Demag offering to €271m

Market conditions appear to have impacted upon another private-equity backed flotation, with KKR and Siemens slashing the amount they plan to raise for German crane maker Demag by €192m.

US private equity firm Kohlberg Kravis Roberts has cut the price of its initial public offering of German crane manufacturer Demag Cranes, according to media sources.
 
KKR bought an 81 percent stake in Demag from German electronics group Siemens in 2002. Siemens owns the remaining 19 percent of the business.
 
The firms were originally expected to price Demag at between €26 and €31, which would have given the company a market capitalisation of approximately €463 million ($582 million) at the top of its price range.
 
However, according to Financial News, KKR and Siemens will raise a maximum of €271 million at a revised price of €22 per share. The two firms have also cut the number of shares being offered from approximately 15 million to 10.7 million with a further 1.6 million in an over-allotment option.
 
Financial News said that the move was the result of “investor sensitivity”, while other reports have suggested that KKR and Siemens are responding to volatility in European stock markets.
 
Earlier this month, Blackstone postponed the flotations of two portfolio companies: Cineworld, the UK’s second largest chain of cinemas, was expected to float on the London Stock Exchange with a market cap of approximately £450 million; Southern Cross Healthcare Group, the UK’s largest provider of care homes, announced that it would postpone and possibly abandon its £275 million IPO.
 
A US banker said: “Most predictions are for markets to come back. So firms are happy to sit out the current volatility.”
 
Other firms to have put proposed stock market listings on hold in recent months include financial betting company CMC Markets, property group Sigma Capital Investments, Perth-based venture capital firm Braveheart Investments and CapVest’s mezzanine arm MezzVest.