CVC Capital Partners, a premier private equity firm in Europe, and a manager of €186 billion in assets, is working towards procuring more than €1.25 billion through an initial public offering on the Amsterdam stock exchange. This move brings an end to their extended interval of remaining private. Valuation is projected to be in the vicinity of €13-€15 billion, as disclosed by a source privy to the plans. Certain shareholders will trade their shares, whereas Blue Owl, a supporter of the company, will escalate its holding.
The announcement echoes the details surfaced in a Financial Times report from the past week, despite the ongoing crisis in the Middle East. CVC’s public listing plans were deferred due to geopolitical disruptions in the past. Again, conflicts in the Middle East led to a brief delay in CVC’s declaration of flotation plans. CVC’s decision to go ahead with their plan shows their belief in the growing momentum of European markets for new issues. The recent past has seen a number of significant IPOs, including those from the skin treatment company Galderma and CVC-supported store company Douglas.
CVC, like its American counterparts like Blackstone, KKR & Co and Apollo Global Management, and European competitors EQT and Bridgepoint, will now enter into public market. A well received response has been observed from Blackstone and EQT’s publicly traded stocks, each trading up by over 40% in the past year.
Founded by Rolly Van Rappard, Steve Koltes and Donald Mackenzie in the early 1990s, CVC has proved itself as one of the largest buyout groups in Europe. The group derives strengths from fruitful investments in a diverse range of companies from Formula One to timepiece manufacturer Breitling. Last year, CVC amassed a record €26 billion for the largest private equity fund ever accumulated.
As part of its growth strategy, the group has delved into a range of asset types, such as credit and infrastructure, in addition to bolstering its central private equity division. In 2021, a share of the group was purchased by Blue Owl, an investment company based in the US, which boosted the business’s value to €15 billion.
According to an official announcement regarding its plans to go public, the firm’s revenues exceeded €1 billion last year. Discussions within the business question whether the continuous pressure to grow assets under management, a requirement when listing, will influence its profit-centric culture.
The firm initially intended to go public in 2022, however, Russia’s complete invasion of Ukraine pushed back the plan. Even though the firm had revisited its plans to list last year, ongoing turmoil in the Middle East led to a second postponement of its proposed listing.
With rising interest rates making deal-making tougher and increasing borrowing costs impacting certain investments, the buyout sector is not without its challenges.
Whilst CVC readied itself to go public, several of its founding executives, with extensive industry experience, chose to retire. Koltes stepped back in 2022, followed by Mackenzie who announced his retirement in February of this year. Once CVC lists, Van Rappard is set to take the helm as chair.
Listing will grant current shareholders, such as the Hong Kong Monetary Authority, Kuwait Investment Authority, and Singapore’s GIC, the opportunity to reduce their investment. Over time, the option to sell stock will also become simpler for past executives like Mackenzie and Koltes.
Listing will further supply CVC with the financial means to chase additional acquisitions, for instance in real estate, and potentially give a leg up in the purchase of DIF Capital Partners, a Dutch infrastructure investment firm, a deal which was announced last year.
Senior executives perceive that going public will amplify the firm’s profile and allow it to accumulate additional funds from a fresh pool of backers including affluent individuals in due course. – Copyright The Financial Times Limited 2024.