TPG reaps $479m in Lenta IPO

Ellie Pullen
03 March 2014

Tweet
Facebook
LinkedIn
Google plus
Send to

Russian hypermarket chain Lenta raised $952m in its IPO on the London Stock Exchange on Friday, with a market cap of $4.3bn and an enterprise value of $5.4bn.

The final offering sat at the lower end of Lenta's indicative price range of $9.5-11.5 per global depository receipt (GDR, five of which make up one share). The Russian company's stock was selling at $9.85 per GDR at market close on Friday, a 1.5% decrease on the opening price.

The offering consisted solely of secondary stock, with TPG Capital selling an 11.1% stake in the business – having held a 49.9% stake prior – for $479m, and VTB Capital Private Equity selling 2.6% of its 11.7% stake for $112.8m.

The European Bank for Reconstruction and Development (EBRD), which held a 21.5% stake prior to the offering, also sold a 4.8% stake for $206.8m.

Other minority shareholders sold a 3.6% stake. Overall, 22.1% of the company's existing share capital was sold in the IPO.

The company started trading on the London Stock Exchange on Friday under the ticker symbol "LNTA". It expects to start trading on the Moscow Stock Exchange on 6 March.

Credit Suisse, JP Morgan and VTB were appointed joint global coordinators, as well as joint bookrunners alongside Deutsche Bank and UBS Investment Bank. TPG acted as co-manager for the flotation, while Rothschild was the financial adviser to Lenta.

Previous funding
TPG and VTB invested in Lenta in October 2009. According to unquote" data, the two firms acquired a 35.4% stake in the business at the time.

Company
Founded in 1993 and headquartered in St Petersburg, Lenta currently operates a chain of 77 hypermarkets throughout 45 Russian cities. The company opened 21 new hypermarkets in 2013.

Lenta also owns 10 supermarkets located in Moscow and the surrounding region, all of which were opened last year as part of Lenta's soft launch of its new supermarket chain.

The retailer generated turnover of RUB 144.3bn in 2013, representing a 31.3% increase from 2012. Its adjusted EBITDA for the year stood at RUB 16.4bn with a margin of 11.4% – a 28.9% increase on 2012.

As of December 2013, Lenta's net debt stood at 2.4x adjusted EBITDA. The company's workforce totals 27,800.

People
Lenta's CEO is Jan Dunning.