EQT's SSP raises £481m in IPO

Ellie Pullen
10 July 2014

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EQT-backed Select Service Partners (SSP), a UK operator of branded food and drink outlets for travel locations, has raised ТЃ481.6m in its IPO on the London Stock Exchange.

The offering gives SSP a market cap of £997m.

The business ended up selling 229.3 million shares at a price of 210 pence each, equalling a free float of around 48.3%.

SSP plans to use £395.2m from the offering to repay some of its senior debt facilities.

Selling shareholders – comprising EQT, mezzanine lenders and both former and current company management and employees – collectively received £15m from the offering.

An overallotment option of up to 34.4 million additional shares has been granted by EQT. Following admission to the stock market, the GP will hold a 44.7% stake in the business, which could be reduced to 37.5% should the overallotment option be exercised in full.

Conditional dealings commenced today (10 July) on the LSE under the ticker "SSPG", with admission to the main market expected to take place on 15 July. Goldman Sachs and Morgan Stanley have acted as joint sponsors and global coordinators, as well as joint bookrunners alongside Bank of America Merrill Lynch and Jefferies. Nomura and Shore Capital acted as co-lead managers.

Previous investment
EQT acquired SSP in July 2006. The deal was valued at £1.2bn, according to unquote" data, with EQT investing via its €2.5bn EQT IV fund, as well as providing mezzanine financing via its €189m EQT Expansion Capital I vehicle.

Mizuho Corporate Bank, Dresdner Kleinwort and Morgan Stanley acted as lead arrangers for the senior and mezzanine debt facilities put in place for the deal. According to unquote" data, Intermediate Capital Group also provided mezzanine financing.

In April 2009, SSP was reported as being in talks with its lenders as falling commuter numbers at the time led to concern that the company was in danger of breaching its covenants. According to unquote" at the time, the group's operating profit fell drastically in 2008, resting on £5.3m after achieving £19.5m in 2007.

In June of the same year, reports began to surface that EQT was planning on injecting up to £100m of fresh equity into SSP, having already provided £20m in equity in March. The firm was attempting to encourage lenders to ease the terms of SSP's hefty debt burden, due to the threat of a £30m interest payment looming in July of that year.

Company
Headquartered in London, SSP operates more than 1,900 branded food and beverage outlets at almost 570 sites across 29 countries, including 125 airports and 271 railway stations, where most of its revenues are generated.

The company's portfolio of represented brands include Starbucks, Burger King, M&S Simply Food, Millie's Cookies and Uppercrust.

SSP generated revenues of £1.8bn for the year ending September 2013, as well as an underlying EBITDA of £152.7m. The company employs 30,000 staff.

At the time of EQT's acquisition in 2006, SSP employed 22,000 staff and generated revenues of £1.1bn, according to unquote" data.

People
Kate Swann is the CEO of SSP.