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Brenntag's €2.7bn IPO

Brenntag.jpgThe blog congratulates Brenntag, the leading distribution company, on its successful flotation yesterday.

Its shares were issued at €50, and rose to €52 in early trading, giving it a market capitalisation of €2.7bn ($3.6bn). New private equity owners BC Partners sold 4.45m shares to raise €223m, and now own 71% of the company.

Brenntag itself also raised €525m by selling 10.5m shares. This enabled it to repay expensive mezzanine debt, and will also finance potential acquisitions in Asia and Latin America.

As distribution industry expert Marc Fermont of DistriConsult noted in a recent speech, the "IPO is a major industry event whose success was essential for the whole sector". He added that Brenntag was a relatively safe investment, as "distributors tend to bring regular cash flows measured as EBITDA, including in period of crisis (whilst) financial risks are limited as very few bankruptcies are reported in the sector".

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