Spain’s IPOs Applus, EDreams Odigeo Advance in Recovery Sign

Apr 02, 2014 11:47 am ET

(Updates with King Digital IPO in seventh paragraph.)

April 2 (Bloomberg) -- Applus Services SA, a Carlyle Group LP-backed inspection company for industries including transport and energy, and online travel agency EDreams Odigeo are moving ahead with initial public offerings in further signs of a market recovery in Spain.

Applus, based in Barcelona and owned by Carlyle and Investindustrial Advisors SpA, today announced plans to sell new and existing shares. The price range for the EDreams Odigeo IPO was 9.25 euros to 11.50 euros a share, and investors were told today that orders of less than 10.25 euros a share may miss out, according to terms of the deal obtained by Bloomberg News.

Applus’s IPO is seeking to raise about 1 billion euros ($1.4 billion), including a sale of new shares by the company for 300 million euros, two people familiar with the matter said. The company may be valued at about 2 billion euros, excluding debt, the people said, asking not to be named as the details aren’t public.

Applus and banks are meeting investors today, terms of the deal showed. Applus and Carlyle representatives declined to comment on valuation when contacted by Bloomberg News by phone today. Investindustrial didn’t have an immediate comment.

Spanish companies are starting IPOs as investors return to the Iberian market on the promise of an economic recovery after the sovereign debt crisis. IPOs in Europe have raised about $17 billion this year, more than triple the amount in the same period in 2013, data compiled by Bloomberg show.

Big Appetite

“There is a huge appetite for Spanish companies both by local and international investors,” Francisco Salvador, a Madrid-based strategist at FGA/MG Valores, said by phone today. “Many businesses seeking IPOs are still unprofitable, both in Spain and in markets such as the U.S., which is a big concern as it’s a reminder of the Internet bubble of the early 2000s.”

King Digital Entertainment Plc, maker of the “Candy Crush” smartphone game, suffered the biggest decline of a newly listed U.S. company in more than four months on March 26, even after it priced its shares at a discount to its major peers. The shares are now trading at 12 percent less than the offer price.

Applus Spending

Applus said its proceeds from the IPO will be used to pay down debt and for investments including potential acquisitions.

Morgan Stanley, UBS AG, Citigroup Inc. and JPMorgan Chase & Co. are among banks managing the Applus IPO.

Applus, which operates in more than 60 countries and has about 19,000 employees, reported operating profit before depreciation, amortization and other items of 200 million euros last year on revenue of 1.6 billion euros, the company said today.

At an IPO price of 10.25 euros, EDreams Odigeo will raise at least 376 million euros and have a market capitalization of 1.1 billion euros, according to terms of the deal today. The company, which is owned by Permira Advisers LLP and Ardian, the private-equity firm formerly known as AXA Private Equity, will begin trading on April 8, the terms showed.

JPMorgan, Deutsche Bank AG and Jefferies Group LLC are among banks managing the EDreams Odigeo IPO.

--With assistance from Kiel Porter in London.