ISS owners drop $8.5bn Apax talks to pursue IPO

City A.M. Reporter
DANISH outsourcing firm ISS has broken off talks on an $8.5bn (£5.5bn) takeover by private equity firm Apax and will seek a share flotation instead.

The company’s owners, Goldman Sachs and Swedish buyout firm EQT, had previously considered an initial public offering before pursuing the outright sale of the group, one of the world's largest facilities services firms which employs more than 500,000 people.

A sale to Apax would have been the largest leveraged buyout since the credit crisis struck.

ISS has written to Apax to formally break off talks, a spokesman for the company said.

“Together with our two global coordinators – Morgan Stanley and Goldman Sachs – we have made significant preparations towards an IPO option which remains the owners’ and the company’s preferred option,” said ISS CFO Jakob Stausholm in an interview with Reuters.

“Our owners have reaffirmed their belief in ISS and the strong future potential of the company by favouring an IPO route rather than making a complete sale of their shares, as an IPO will give the owners a share in the future upside and growth prospects of ISS,” Stausholm added.

The talks with Apax were called off about a week ago because of differences in buyer and seller price expectations, a banking source familiar with the matter said.

No one at Apax, EQT or Goldman Sachs was immediately available to comment.