News Column

Fast Food Chain SSP Confirms IPO Plans As FDM Group Sets Offer Price

June 17, 2014

Rowena Harris-Doughty

LONDON (Alliance News) - Fast-food chain group SSP Group PLC Tuesday confirmed plans for a summer stock market debut on London's main market, while IT and business services provider FDM Group Holdings PLC priced its shares at 287 pence per share for its own initial public offering.

SSP Group, which owns Upper Crust and Caffe Ritazza outlets, primarily located in travel locations, said its looking to raise gross proceeds of around GBP500 million from the issue of new shares, funds it said the company would use to reduce existing borrowings and to settle other financial obligations. Existing shares also will form part of the IPO.

A person close to the IPO process told Alliance News the flotation will give SSP an enterprise value of between GBP1.6 billion and GBP2 billion, which would make it one of the biggest companies to make an initial public offering in London so far this year.

SSP said a stock market debut is the logical next step for the group to achieve its plans for future growth.

"SSP has proved itself to be a robust and resilient business that is capable of consistently delivering profitable growth," said Non-Executive Chairman Vagn SØrensen in a statement.

In the year ended September 30, 2013, SSP reported revenues of GBP1.83 billion, with underlying earnings before interest, taxes, deprecation and amortisation of GBP152.7 million. In the six months ended March 31, the group reported a 4.6% revenue increase at constant currency, and a 13% increase in underlying EBITDA.

Last week B&M European Value Retail SA, the discount retailer chaired by former Tesco PLC Chief Executive Terry Leahy, became the biggest London IPO so far in 2014 with an initial market value of GBP2.7 billion, prior to which insurance provider Saga PLC listed in May with an initial market capitalisation of GBP2.1 billion.

SSP, which is headed by well-respected former WH Smith Chief Executive Kate Swann and owned by Scandinavian private equity firm EQT, said the IPO also will give existing shareholders a chance to sell down their holding with the opportunity for a "partial realisation of their investment

SPP, which has fast-food outlets nearly 2,000 train stations and airports, generates almost all of its revenue from its airport and railway station outlets, which are everywhere from the UK, Europe and North America, to Asia Pacific and the Middle East. The group also operates outlets at motorway service areas, leisure locations and hospitals and operates Rail Gourmet, an on-board rail catering business.

Goldman Sachs International and Morgan Stanley & Co International are acting as joint sponsors for the IPO.

SSP was joined Tuesday by professional IT and business services provider FDM Group Holdings PLC, which said it will place 84.6 million shares on London's main market at 287 pence per share.

The company is looking to raise GBP242.7 million in proceeds, mostly for existing shareholders, with the IPO giving FDM a market capitalisation around GBP308.5 million, based on 107.6 million shares.

"A public listing will help accelerate this next phase of our development, providing additional funding and raising the profile of FDM with clients and potential employees," said Chief Executive Rod Flavell in a statement.

FDM, which was founded in 1991, said that out of the GBP242.7 million it hopes to raise, GBP8.0 million will be for the company to repay offer-related fees, bank debt and for general working capital purposes, while the remaining GBP234.7 million will be for the selling shareholders. It said Inflexion Private Equity will sell their entire shareholding in the company.

The company's directors and senior management team will retain 20.4% of the issued share capital of the company, leaving a 79.6% free float.

Investec Bank PLC is leading the IPO.

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Source: Alliance News

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