Nets IPO is largest Nordic PE-backed listing for six years

Mikkel Stern-Peltz
23 September 2016

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Bain Capital Europe and Advent Internationalтs Danish payments provider Nets was valued at DKK 30bn on its introduction to Nasdaq OMX Copenhagen.

According to unquote" data, the IPO is the largest private-equity-backed listing in the Nordic region since Apax, Blackstone, KKR, Permira and Providence floated Danish telecoms business TDC in December 2010 with a market cap of DKK 41.5bn. Advent and Bain's exit comes just two years after the two GPs acquired Nets from a group of Danish and Norwegian banks for DKK 17bn.

Before any overallotment, the total value of the flotation is DKK 15.75bn, increasing to as much as DKK 18.1bn if the greenshoe is fully exercised. At DKK 150 per share, Nets priced at the higher end of the DKK 130-160 per share range announced ahead of the public market introduction.

In addition to Bain and Advent, exiting investors in the IPO include Danish pension fund ATP through its ATP Private Equity Partners IV and Via Venture Partners Fond II vehicles, as well as Nets' management. Nets CEO Bo Nilsson stands to make upwards of 20x his investment, according to local media. He reportedly invested DKK 30m in the 2014 buyout and post-IPO his stake in the business is valued upwards of DKK 600m.

Following the IPO, Bain and Advent will hold a joint 40% stake in Nets, ATP's funds will own 2.3% and CEO Nilsson will hold 1.47% through a vehicle jointly held with his wife. If the overallotment is fully subscribed, the stakes will reduce to 32.6%, 1.9% and 1.44%, respectively.

Proceeds of DKK 5.5bn were raised through the sale of 105 million shares consisting of 68.33 million existing shares and 36.66 newly issued shares. The capital raised will be used to reduce the company's debt burden.

Nets began trading on the Copenhagen stock exchange at the opening on Friday 23 September, initially trading slightly down on its DKK 150 a share introductory price. Post-listing the company has around 52% of its shares in free float, rising to 60% if the overallotment option is fully exercised.

Approximately 42,000 new investors acquired shares in Nets through the offering, 89% of which were bought by Danish and international institutional investors.

Deutsche Bank, Morgan Stanley and Nordea acted as joint global coordinators and joint bookrunners. Danske Bank, DNB Markets, JP Morgan and UBS were joint bookrunners, while Carnegie, OP Corporate Bank, SEB, SpareBank 1 and Sydbank were co-lead managers.

Previous funding
Advent, Bain and ATP completed the MBO of Nets in March 2014, acquiring the business for DKK 17bn from a group of 186 Danish and Norwegian banks.

The private equity consortium said at the time of the buyout it expected a flotation to be the exit route for Nets.

Company
Headquartered in Copenhagen, Nets is a provider of payment and digital identity services.

The company's history goes back to 1968, when a group of Danish banks founded PBS as a payment systems company. Nets in its current form was founded in 2009 through the merger of PBS and Norway's Nordito.

Nets generated DKK 3.58bn of revenue in H1 2016 with an EBITDA of nearly DKK 1.2bn. It employs a staff of 2,400.

People
Advent International – James Brocklebank (managing partner, Nets board member).
Bain Capital Europe – Robin Marshall (managing partner, Nets board member).
Nets – Bo Nilsson (CEO).

Advisers
Company – Lazard & Co (corporate finance).