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Posted August 16, 2012
LEGO Owners, Ontario teachers invest $614 million in ISS
COPENHAGEN (Reuters) - Toymaker Lego’s owners and a Canadian pension fund are to
pay 3.72 billion Danish crowns ($614 million) for a 26 percent stake in Danish
cleaning group ISS ISSHOI.UL, which will use the money to cut debt, relaunching
its IPO plans.
ISS made a failed attempt at an initial public offering last year after which it
agreed to a 130 Danish crowns per share cash and share offer from G4S Plc
(GFS.L: Quote), a deal the British security services group later scrapped.
Thursday’s deal was worth 105 crowns per share, said ISS, which has been focused
on cutting debt and boosting growth.
“ISS is on track to significantly deleverage ahead of an IPO within a few
years,” chairman Ole Andersen said.
The Ontario Teachers’ Pension Plan will invest about 2.605 billion crowns for
its stake, while the Danish Kirk Kristiansen family’s holding and investment
company, Kirkbi A/S, which controls LEGO, will pay 1.116 billion.
ISS’s owners, private equity groups EQT Partners and Goldman Sachs Capital
Partners (GS.N: Quote) are not selling any shares and remain majority owners,
ISS said.
The proceeds will be used to repay 11 percent senior notes due 2014 after the
December 2012 call date. The capital injection will lower ISS’s leverage ratio
to 5.15 times earnings before interest, tax, depreciation and amortization
(EBITDA) from 5.86, ISS said.
Kirkbi, which owns 75 percent of the LEGO Group, said it had been watching ISS
for several years and considered it a well-run company, positioned for growth,
particularly in emerging markets.
“We see excellent opportunities to continue growing revenues as ISS is well
placed to capture new customers,” said Jo Taylor, who heads Teachers’ London
office.
With roughly C$117 billion ($118 billion) in net assets, Teachers’ is the
largest single-profession pension plan in Canada. It invests and administers the
pensions of about 300,000 active and retired teachers in Ontario, Canada’s most
populous province.
“We look forward to helping ISS expand successfully in both developed and
emerging markets,” Taylor said in a statement.
ISS said that, while the capital injection does not change its financial outlook
for 2012, it is expected to positively impact the company’s financial position.
A lender to ISS, who asked to remain anonymous, said: “It is very positive news.
We like the company, but it is pretty over levered and this will allow them to
bring down the debt.
“It is quite an unusual move to come in on the equity as it dilutes EQT’s (and
Goldman Sachs’s) stake, but Teachers and Kirkbi have money to invest and we
welcome it.”
($1 = 6.0604 Danish crowns)
($1 = 0.9883 Canadian dollars)
(Reporting by John Acher in Copenhagen and Euan Rocha in Toronto; Additional
reporting by Isabell Witt in London; Editing by Dan Lalor and Andre Grenon)
Reuters.com
A small copy from the London Evening Standard:
Ole Andersen, chairman of ISS, said: “The board of directors of ISS is very
pleased to welcome such respected and successful long-term investors. This is a
testament to the strength and attractiveness of ISS as an investment
opportunity. Together with our two majority owners, the board will work closely
with the new investors on ISS’ value creation. ISS is on track to significantly
deleverage ahead of an IPO within a few years.”
Kirk Kristiansen is the grandson of the founder of LEGO. His father was mainly
responsible for the toy company’s phenomenal growth which saw his son’s
portrait regularly used on the plastic brick sets’ packaging.
Kristiansen is Denmark’s wealthiest man with his family fortune estimated at
$3.3 billion (£2.1 billion). The family trust owns 75% of LEGO and a 36% stake
in the theme parks group Merlin Entertainment, which owns LEGOLAND. One of his
three heirs, his daughter Sofie, is a close friend of the Danish Crown Princess
Mary.
Standard.co.uk
-end of report-
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