Sweden’s EQT Partners confirmed plans to list in Stockholm on Monday as the private equity firm, one of Europe’s biggest, seeks to expand and lock horns with larger global competitors.
EQT, which sources told Reuters last week would target a 4 billion euro ($4.5 billion) valuation, said it would issue at least 500 million euros of new shares, while existing shareholders will sell parts of their stakes in the initial public offering (IPO).
With 40 billion euros ($45 billion) under management, EQT has transformed itself since its 1994 launch from an investment arm for Sweden’s influential Wallenberg family into Europe’s second-largest private equity fund behind Britain’s CVC, and the world’s seventh-largest.
“The majority of our global competitors have strengthened their balance sheet either by listing or through private transactions, and we see it as a prerequisite to competing as a major global player,” EQT chief executive Christian Sinding said.
“We intend to expand across geographies and this will help us achieve that,” Sinding told reporters on a media call.
In total, EQT is targeting to list approximately 20% of the total number of shares, including both the newly-issued shares and the sale by existing shareholders, implying a deal size of around 800 million euros.
EQT’s planned listing will be one of the largest Nordic IPOs so far this year, behind Volkswagen’s trucks unit Traton, which listed on the Frankfurt and the Stockholm stock exchanges in a 1.55 billion euro deal.
The deal comes as a deteriorating outlook for Europe’s economy and worries about global trade tensions are expected to weigh on the IPO market across the continent.
One banker working on the EQT IPO said he was confident that companies that offer “size and quality” should get their deals through, and provide encouragement for others.
EQT confirmed a Reuters report that JP Morgan and SEB will act as global coordinators for the IPO, while Morgan Stanley, Goldman Sachs, Nordea and UBS are bookrunners on the deal.
ABG, BAML and BNP Paribas join the syndicate as co-lead managers.
Sinding said EQT is expecting to pay out a total 2019 dividend of 200 million euros to shareholders, payable in 2020.
The firm will conduct two weeks of “pre-marketing”, when analyst reports on the business go out to the market, followed by two more weeks of roadshows, when order book will be open for investors, market conditions permitting.
This will be followed by pricing around the end of September.