PE-backed Allegro announces intention to float

According to a statement, the IPO is expected to comprise a primary component that will produce gross proceeds of around €225m, as well as a secondary component from existing shareholders, including its PE sponsors and some members of its management team.

The company aims to achieve a valuation within the €10-12bn range, the Financial Times reported. Individuals close to the matter said the potential float valuation being targeted by Allegro’s advisers would make the group the largest Polish listed company.

Allegro intends to use the proceeds, alongside a new credit facility, to repay its existing debt and to improve its net leverage, the company said in the same statement.

Lazard is acting as financial adviser to Allegro. Goldman Sachs and Morgan Stanley are acting as global coordinators and joint bookrunners, while Santander and MB PKO BP have been appointed as joint bookrunners and co-offering agents in Poland regarding its offering to retail investors.

Barclays, Bank of America Securities Europe, Citigroup and Dom Maklerski Banku Handlowego are also acting as joint bookrunners.

Provided that the IPO proceeds, Bank Polska Kasa Opieki Spółka Akcyjna, Crédit Agricole, Erste Group, Pekao Investment Banking and Raiffeisen Centrobank will act as co-lead managers.

The company plans to issue a prospectus to the Luxembourg Financial Supervisory Authority.

Mid Europa Partners, Permira and Cinven acquired Allegro.eu in October 2016 from South Africa-based Naspers in a deal valued at $3.253bn. The European Bank for Reconstruction and Development (EBRD) also provided €24m in equity to back the deal.

According to Unquote sister publication Debtwire, debt financing of $1.2bn was provided by Goldman Sachs and Societe Generale, alongside Bank of America Merrill Lynch, BNP Paribas, Crédit Agricole, Deutsche Bank, ING, HSBC, Bank of China, Bank of Tokyo, Alior, MBank, Erste Group, Raiffeisen, JP Morgan, PZU, EBRD and UniCredit to support the deal. The consortium also provided a rolling credit facility of $81m.

Permira invested in Allegro via Permira VI, which held a final close in January 2017 on €7.5bn. The fund was 91% deployed as of March 2020, according to Unquote Data. At the time of the investment in Allegro, Cinven was deploying equity via Cinven VI, which held a final close in June 2016 on €7bn. The fund was 75% deployed as of March 2020.

Allegro serves 12,300,000 active buyers, according to a statement, with 117,000 merchants selling goods on its online platform. The company has seen revenue growth of 50% in H1 2020, alongside adjusted EBITDA growth of 20% in 2019 versus growth of 28% in H1 2020, during which it reported an EBITDA margin of 45%. The firm's gross merchandise value accounts for 3% of the total retail market in Poland, it said in a statement, comprising $7.1bn for the 12 months to 30 June 2020.

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• Topics
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