Charterhouse’s Elior raises €847m in IPO

The offer price was set at €14.75 per share – the lower end of the indicative price range.

A total of €61.7m was raised by Elior's existing shareholders, with the remainder coming from the issuance of new shares – although, if the overallotment option is exercised in full, the amount raised by the selling shareholders could increase to €188.7m.

The company listed this morning (11 June) under the ticker "ELIOR". Deutsche Bank, JP Morgan, Crédit Agricole Corporate and Investment Bank and HSBC France acted as global coordinators and joint bookrunners in the IPO. Barclays and Credit Suisse also acted as joint bookrunners.

Post-flotation, Charterhouse holds a 40% stake in the company. If the overallotment option is exercised in full, the GP's stake will be reduced to 37%.

Charterhouse took Elior private in 2006, in a deal that valued the business at €2.5bn.

Today's listing puts an end to months of uncertainty surrounding a potential sale of the business, with Charterhouse believed to have been looking at a divestment as early as November 2012, when the asset had already been in its portfolio for more than six years.

In Q1 2013, the GP reportedly received a joint €3.5bn bid from CVC and BC Partners. However, it emerged the offer was the only one on the table and came short of Charterhouse's expectations, prompting observers to question whether the GP would ultimately pull the sale.

Meanwhile, Charterhouse started looking at alternatives at the end of Q2 last year, with the GP reported to be mulling an IPO for Elior to take place as early as November 2013.

Just a few weeks later, it emerged that Ardian and Caisse de Dépôt et Placement du Québec made a €3.7bn joint bid for the catering business – close to Charterhouse's initial €4bn asking price and enough to revive the sale process after weeks of virtual standstill.

But despite Ardian confirming in October last year that it was still interested in Elior should Charterhouse be willing to strike a deal, a sale never materialised.

In the meantime, Elior turned to the high-yield market for a refinancing, issuing bonds worth €350m in Q2 last year, maturing in 2020 with a 6.5% coupon. The company was also believed to have negotiated an amend-and-extend on senior debt worth €1.1bn at the same time, pushing the maturity to 2019.

The proceeds of the IPO will mainly go towards reducing the company's debt: €131m has been earmarked to repay 35% of the bonds issued in 2013 at a price equal to 106% of their nominal value, plus accrued interest. Meanwhile, the remaining €615m will repay the senior debt arranged as part of the 2006 buyout.

Company
Founded in 1991 and headquartered in Paris, Elior operates its catering services through 17,500 restaurants and points of sale in 13 countries.

The company claims to have a customer base totalling 3.7 million and generated revenues of €5bn in 2012-13. It employs 105,000 staff.

People
Gilles Petit is the CEO of Elior.

 

To read our analysis of the stock market uptick in France, click here.

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