Exponent's HSS drops in early trading

The business's shares were down in early trading, at around 200 pence at the time of publication.

HSS announced its intention to float in January, setting a share price range of 210–262 pence.

Exponent is making a partial exit through the flotation, with the process comprising a mixture of new and existing shares. However, it remains the business's largest shareholder with a 50.4% stake.

The vending parties, which also include Standard Life and senior management, will share proceeds of between £11–22m, subject to the uptake of a 25% over-allotment option.

The business has undertaken a buy-and-build growth strategy under Exponent's tenure, most recently acquiring Scottish generator hire company Apex Generators in April 2014. Other acquisitions include TecServe, MTS Ireland, UK Platforms and Abird Generator Hire.

When announcing its intention to float, HSS stated it intended to raise £103m to reduce its leverage level and invest in future growth.

JP Morgan acted as global coordinator in the process, as well as taking the role of joint bookrunner alongside Numis Securities.

Previous funding
A consortium consisting of Aurigo Management, Perry Capital, Bank of Scotland Corporate, RIT Capital Partners and Och-Ziff Capital Management Group bought HSS Hire from 3i for £310m in 2007. Exponent then bought the company, at the time generating EBITDA of £39.9m, in a secondary buyout in October 2012.

Company
Founded in 1957 and headquartered in London, HSS rents equipment and tools to trade and DIY customers. In the year to September 2014, the business reported adjusted EBITDA of £67m, up from £56.2m in the 12-month period to December 2013 and £41.3m the year before.

People
Chris Davies is CEO of HSS Hire. Exponent's Oliver Brown has a seat on the board at HSS.

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