Swedish Cable Company Com Hem’s $830 Million IPO to Cut Debt

May 23, 2014 4:48 am ET

(Updates with use of proceeds in first paragraph.)

May 23 (Bloomberg) -- Com Hem Holding AB, the Swedish cable operator owned by BC Partners Ltd., plans to raise about 5.5 billion kronor ($830 million) in an initial public offering as it pays off debt from funding expansion.

Com Hem will trade on the Stockholm exchange and the IPO may include sale of existing stock held by BC Partners, it said today in a statement. JPMorgan Chase & Co., Morgan Stanley and Nordea Bank AB are managing the transaction. The IPO may value Com Hem at about $3 billion, people familiar with the matter said last week.

Chief Executive Officer Anders Nilsson, appointed this year, will use the proceeds to pay off debt accrued as the company added new businesses to combat stagnating sales. Com Hem is increasing broadband speeds over its cable network and has struck agreements with TiVo Inc. and Netflix Inc. to offer video-on-demand. Its acquisition of Phonera Foretag AB this year added products for small businesses.

Private-equity shareholders are exiting stakes they bought since the financial crisis as investors return to Europe’s IPO markets, which raised about $27 billion since the start of the year, the most in the period since 2011, according to data compiled by Bloomberg. BC Partners acquired Com Hem in 2011 for 1.7 billion euros ($2.3 billion), according to its website.

Com Hem, which said it connects to about 39 percent of homes in Sweden, reported first-quarter underlying earnings before interest, taxes, depreciation and amortization of 545 million kronor, compared with 544 million kronor a year earlier. Sales were little changed at 1.12 billion kronor as the number of unique subscribers increased 1.8 percent to 838,000, it said in a statement on May 2.

Swedish TV

Nilsson spent 20 years at broadcaster Modern Times Group AB, where he ran the company’s Swedish TV unit and online business division. He joined Com Hem from Stockholm-based Millicom International Cellular SA, an emerging-markets focused phone company, where he ran the commerce and services division.

Nilsson is one of a number of high-level appointments that Com Hem made in the run-up to the IPO announcement, including new Chief Operating Officer Jon James, who previously ran Virgin Media’s broadband and TV business, and Executive Chairman Andrew Barron, formerly chief operating officer of Virgin Media. A new chief technical officer and chief product officer were also appointed last year.

The executives are charged with reversing sales declines after the company lost subscribers in 2013 and 2012. Com Hem competes with Telenor ASA, the Nordic region’s largest phone company, and TeliaSonera AB, the biggest phone company in Sweden.

Carnegie is joint bookrunner for the sale and Rothschild is financial adviser to Com Hem.