Terra Firma to list Deutsche Annington

The flotation plans, due to value the property group at up to €11bn, come amid rising expectations that the UK firm will return to the fundraising trail later this year.

Terra Firma Capital Partners is preparing to float Deutsche Annington, a real estate group, on the Frankfurt Stock Exchange. 

The company, which hopes to raise €1.2 billion through the IPO, has confirmed plans to seek a public listing before the end of the year. Comprising €400 million worth of new shares, the offering would value the group at around €11 billion.
Guy Hands, the founder and chairman of Terra Firma, bought Deutsche Annington in 2001, when he was still in charge of European leveraged buyouts at Japanese lender Nomura. The landlord, then valued at €2 billion, had a portfolio of 64,000 railway employee homes. 

In 2005, Hands acquired Viterra, the real estate division of German utility Eon, and merged its portfolio with that of Deutsche Annington. He then took control of the company via a fund managed by Terra Firma, which he had founded in 2002 through a spin out from Nomura. 

Guy Hands

Deutsche Annington posted €474 million of EBITDA last year, roughly in line with profits generated in 2011. It currently owns 180,000 properties, making Germany’s largest landlord by volume. 

The float would provide a timely exit for Terra Firma, which is expected to return to the fundraising trail this year. The firm, which has not raised a vehicle since losing control of music publisher EMI, also is reportedly looking to sell Odeon, the UK cinema chain, Infinis, a British wind farm operator, and Phoenix, an Irish gas utility, in a bid to return further cash to its investors.  

The IPO also is the latest major private equity-backed listing confirmed this month, following similar plans confirmed last week by Foxtons, the real estate agency chain owned by BC Partners, Springer Science, a medical publisher backed by EQT, and Kion, the forklift business owned by Kohlberg Kravis Roberts

The European IPO market, underpinned by the strong performance of stock markets, has showed signs of revival since the beginning of the year. Ten companies have been floated on European exchanges so far this year, compared to three in 2012, according to Dealogic. 

These have raised a total of €2.7 billion, a significant jump from the €2.3 billion raised last year – with significantly more expected from the major listings announced in recent weeks.