Saturday 22 November 2014

Viridian expected to raise €1.25bn with stock market flotation

Published 16/08/2014 | 02:30

Belfast-based Viridian owns Power NI and Energia, which in turn operates the Huntstown Power Station in Dublin
Belfast-based Viridian owns Power NI and Energia, which in turn operates the Huntstown Power Station in Dublin

The owners of Northern Ireland's Viridian Group are mulling a stock market flotation that could value the business at £1bn (€1.25bn).

Belfast-based Viridian owns Power NI and Energia, which in turn operates the Huntstown Power Station in Dublin.

The energy business is ultimately owned by Arcapita, based in Bahrain.

An initial public offering (IPO) is expected to be launched before the end of the year with the listing likely to be in London, according to newswire Reuters.

It said JPMorgan had been tapped to arrange the deal.

In a statement Viridian said the group regularly works with a range of banks, including JP Morgan, to assist with financing and strategic options, but has not made a decision on whether or not to pursued a flotation.

"We have made no decision to proceed with an IPO and JP Morgan has not been appointed as a global co-ordinator," the company said.

An IPO would mark a dramatic turnaround for Viridian. The company was bought by Arcapita at the end of 2006 for €3.2bn in a debt-financed deal, just before the global down turn.

Early in this decade the business was restructured including through a sale of its NIE Northern Ireland electricity business to the ESB for €1.4bn, a refinancing of some debt and €120m injection of capital from the owners.

Viridian was created out of the 1993 privatisation of Northern Ireland Electricity. Its reported earnings before interest, tax, depreciation and amortization of £99m (€124m) in the year to the end of March on £1.6bn (€2bn) of revenue. Net debt has dropped to £582.7m (€726m).

Valuation

According to Thomson Reuters data shares in UK industry peers SS&E, Centrica, Drax, United Utilities, Severn Trent and National Grid on average are currently trading on an enterprise value (EV) to prospective EBITDA multiple of 10.3 - implying a valuation for Viridian in excess of £1bn.

Last year Viridian led one of the bid groups competing to buy Bord Gais Energy, but it and rivals Blackstone eventually lost out to a consortium led by Centrica.

The Arcapita private equity group is backed by wealthy states, families and individuals mainly based in the Middle East.

Viridian is one of its biggest European investments, and one of the longest held.

As with all private equity houses is aims to buy and sell firms over relatively short time horizons.

According to the company, its aim is to "nurture and grow the investments through the holding period with strategic and financial support when necessary, and at the appropriate time, to position the company for sale to a financial or strategic buyer, or through an IPO."

Irish Independent

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