BC Partners raises £672m in German IP0

City A.M. Reporter
Brenntag, the world’s biggest chemicals distributor, received a warm reception in its market debut as Germany's second-biggest floatation this year in a transaction that will net its private equity owners BC Partners £672m.

Brenntag’s listing comes as the global market for initial public offerings (IPOs) is gathering pace, after a number of downsizings and postponements, although investors are still being selective.

Last week cable television company Kabel Deutschland failed to gather much support in Europe’s biggest listing so far in 2010, closing just 1.1 percent above the issue price of €22 (£19.78) per share.

Shares in Brenntag opened at €51.1 and a 2.2 per cent premium to its issue price yesterday and gained as much as 4.8 per cent during trading.

BC Partners, which bought Brenntag for about €3bn including debt in 2006, is keeping 71 per cent of the company, which will have net debt of €1.3bn after the IPO.

“The initial public offering went well, signalling that investor confidence is slowly returning to the market,” a local trader said.

Brenntag competes with Bunzl in the UK.] The Germany-based company is the fourth company to float successfully on Germany's stock market in 2010, just a day before China’s Joyou which would be the fifth.

BC Partners last year admitted that one of its more high profile investments, that of the London estate agency Foxtons at the height of the property boom, was a mistake.

It purchased the chain from property entrepreneur Jon Hunt for £360m soon before the credit crunch hit.

Andrew Newington, BC managing partner, said last year that the buy-out firm had anticipated a 30 per cent slowdown when it planned the takeover but sales of homes in Britain’s capital city slowed as much as 70 per cent after it acquired the chain.

“We made the wrong call,” Newington said at the time.