A supplier of mechanical parts to some of Europe’s biggest factories is set to become the largest industrial group to float on the London stock market in almost a decade.
Rubix, which is owned by private equity group Advent and supplies components to plants run by companies including Nestlé, Coca-Cola and Procter & Gamble, plans to raise €850m. The company’s valuation has previously been estimated at about £2.5bn.
Its intention to float is a lift for London’s IPO market as it faces uncertainties after volatility has convinced some prospective companies to withdraw listing plans.
Roof tiling group Marley this week postponed its plans to list. Its decision followed a sharp fall for Eurowag, a European payment service for trucks, on its market debut a week earlier and the withdrawal of plans by commodities broker Marex Spectron to trade publicly earlier in the year.
Rubix’s listing would be the largest in the industrial and service support sector since Royal Mail became publicly traded in 2013.
The company, which provides parts from bearings to power transmission, was formed through the merger of Brammer and IPH in 2017. It has a €2.4bn revenue and €221m of earnings before interest, tax, depreciation and amortisation, making it a market leader in the fragmented European market of spare factory parts distribution.
Chief executive Martin Thomsen said he had a list of 346 companies with €16.3bn of revenues that he would like to buy, citing its record of 14 small bolt-on deals and three to five larger deals for companies averaging €30m each year.
“We believe we are the consolidator of this unconsolidated industry,” he told the Financial Times. “It’s not just yellow pages in the phone book, it’s coming to speak with those companies on a regular basis.”
The group will raise the proceeds by issuing new shares and 25 per cent of issued shares would be free-floated — some of which could include the sale of existing shares. It would likely become a large FTSE 250 company.
US buyout group Advent, which took over UK aerospace and defence supplier Cobham, is set to remain a significant shareholder in the listed business.
Shonnel Malani, managing director at Advent International, said: “Rubix provides a superb case study demonstrating the value that can be created by carefully bringing together great businesses to create a market leader.”