MILAN (Reuters) -Italy’s Industrie De Nora is counting on cornerstone investors to brave volatile markets and press ahead with what could become the biggest European initial public offering so far this year.
The electrode maker said on Monday it was seeking a valuation of up to 3.28 billion euros ($3.45 billion) in its IPO on the Milan bourse, to be completed by the end of this month.
The company, founded in 1923, is a leading manufacturer of electrodes for electrochemical devices such as rechargeable batteries and makes systems for water filtration and waste water treatment as well as components to produce green hydrogen.
Both European and U.S. listings have paused after the Ukraine conflict started in February, with activity in Europe and the United States down 88% and 90% in the first quarter, respectively, from a year earlier.
Germany’s Thyssenkrupp said on Friday it would not pursue an IPO of its hydrogen division Nucera in current market conditions.
De Nora set a price range on Monday of between 13.50 and 16.50 euros per share for its listing, valuing the group at 2.72 billion-3.28 billion euros after taking into account the capital increase from the sale of new shares.
The group’s current investors – the De Nora family and Snam – are going ahead at a valuation below analysts expectations as they aim to raise funds to develop the business quickly in an highly competitive sector, one source with knowledge of the matter said.
Two sources told Reuters in early June that De Nora could have been valued at more than 4.5 billion euros.
The group said it would offer 17.4% of its shares on the market, a bit less than expected few weeks ago.
Despite market volatility, the listing is expected to be supported by investor interest for De Nora’s business related to energy transition and also by a strong backlog of orders the company can count on.
As Europe rushes to cut its dependence on Russian oil and gas without deviating from its path to cut carbon emissions, alternative and environment-friendly energy sources such as green hydrogen – hydrogen produced by splitting water into hydrogen and oxygen using renewable electricity – are attracting increasing interest from investors.
CORNERSTONE INVESTORS
SQ Invest, entirely owned by energy group ERG’s controlling shareholder – the Garrone family – will act as cornerstone investor in the offer, De Nora said.
Both SQ Invest and 7-Industries Holding BV, an investor specialising in high-tech industrial companies, will commit to buying shares for up to 100 million euros each, De Nora said, adding this should result in the two investors taking more than a third of the offer.
Credit Suisse and Goldman Sachs International are acting as joint global coordinators and joint bookrunners, BofA Securities, Mediobanca and UniCredit are joint bookrunners.
Latham & Watkins is acting as legal advisor to the company, legal firm Pedersoli is advising the De Nora family and Clifford Chance is advising the joint global coordinators and joint bookrunners.
Controlled by the De Nora family with a 64% stake, with the rest owned by Snam, the group reported revenue of 616 million euros with a core profit of 127 million euros in 2021.
($1 = 0.9503 euros)
Reporting by Giulia Segreti and Francesca LandiniEditing by Agnieszka Flak, David Goodman and Susan Fenton
Source: Reuters
