PE-backed Ontex raises €518.6m in IPO

Ellie Pullen
25 June 2014

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Belgian baby and feminine care products maker Ontex, backed by GS Capital Partners and TPG Capital, has raised €518.6m in its IPO, giving it a market cap of €1.2bn.

The company sold a total of 28.8 million shares at a price of €18 each, comprising 18 million new shares and a further 10.8 million existing shares. A further 4.3 million have been granted by the selling shareholders as an overallotment option.

The selling shareholders, comprising TPG, GS Capital and members of Ontex's previous and current management team, reaped a total of €193.6m through the flotation, with the chance of raising a further €77.8m should the overallotment option be exercised in full, bringing the total proceeds for the selling shareholders to €271.4m. The balance of €325m has been netted by Ontex and will be used to pay down debt.

The IPO gives Ontex an enterprise value of approximately €1.87bn based on total debt of €645.6m as of March 2014, equivalent to around 10.7x adjusted EBITDA for 2013.

Following the flotation, GS Capital's and TPG's holding company Whitehaven will own a 51% stake in the business, which could be reduced to 45.1% through full exercise of the overallotment option.

Ontex announced its plans to float earlier this month.

The company will list on the Euronext Brussels tomorrow (25 June) under the ticker "ONTEX". Bank of America Merrill Lynch, Goldman Sachs and UBS have been appointed joint global coordinators and international bookrunners for the flotation. TPG is acting as international co-manager while KBC Securites and Petercam are joint lead managers.

Previous funding
The flotation marks the second time that the Belgian company has gone public. In January 2003, Candover took the business private for slightly more than €1bn, €430m of which was provided as equity, €510m as senior debt and a further €165m from a syndicate of mezzanine lenders.

The transaction comprised the acquisition of 6.8 million shares, representing a stake of 77.96% in the company, according to unquote" data. The fund then launched a takeover bid to delist Ontex from the Brussels exchange.

The deal marked the largest ever buyout in Belgium at the time, though this was then overtaken by GS Capital and TPG's secondary buyout of the business in July 2010 for €1.2bn.

The two firms each contributed €265m, with the balance of €670m provided as debt by Bank of America Merrill Lynch and Goldman Sachs, according to unquote" data. An auction process for the sale of Ontex commenced in 2009 and attracted several GPs, though GS Capital's initial bid fell through when its original partner backed out of the potential deal.

Company
Ontex was founded in 1979. The business is headquartered in Zele with 12 manufacturing facilities across eight countries, and sales offices in 11 countries.

Ontex produces disposable hygiene products for the private label sector such as nappies, baby wipes and feminine care products.

The business employs 4,250 staff. It recorded revenues of €1.49bn in 2013 – a 14% year-on-year increase – as well as an EBITDA of €156.3m and an adjusted EBITDA of €173.6m.

People
Charles Bouaziz is the CEO of Ontex.