CVC Looks to Raise at Least $1.3 Billion in Amsterdam IPO
Buyout giant seeks valuation of up to $16 billion, sources say
Global buyout firm CVC Capital Partners said it plans to list its shares in Amsterdam, making a second attempt to go public in less than six months.
CVC said Monday that it expects to raise at least 1.25 billion euros, equivalent to around $1.33 billion, by selling new shares as well as stock from some existing shareholders. The listing is expected to take place in the coming weeks, it said.
The Wall Street Journal reported Sunday that CVC was poised to launch the initial public offering. CVC is looking for a valuation of around €13 billion to €15 billion, people familiar with the matter had told the Journal.
The firm pulled a previous IPO attempt in November, after the outbreak of war in the Middle East weighed on an already jittery market. Conditions have since improved, with rallying stock markets helping fuel a rebound in new listings in Europe and the U.S., from companies such as the social-media company Reddit and Swiss skin-care specialist Galderma.
CVC oversees about €186 billion, or about $198 billion, in investments, spanning private equity, credit and infrastructure. It has forged a particularly high profile in sports-related deals. In 2016, a CVC-led group sold the Formula One motor-sport franchise to John Malone’s Liberty Media for $4.4 billion. Current sports holdings include investments in the Six Nations Rugby tournament and the Women’s Tennis Association, according to its website.
For Luxembourg-based CVC, a listing offers the firm’s partners and other shareholders the chance to realize gains on their holdings, while raising the alternative asset manager’s profile to support future fundraising. The buyout firm will also gain a currency to grow faster through acquisitions, which could broaden its reach and help it expand geographically.
Its Swedish counterpart EQT AB struck a $7.5 billion all-stock deal in 2022 to buy rival Baring Private Equity Asia. Its shares are up about 26% over the past three months, in another bullish sign for CVC’s planned listing.
Leading CVC’s IPO effort are the firm’s co-chairman Rolly Van Rappard, and longtime partners Rob Lucas, the firm’s chief executive, and Chief Financial Officer Fred Watt.
Van Rappard, Donald Mackenzie, Steve Koltes and Michael Smith co-founded the business as an arm of Citigroup more than 40 years ago, helping spearhead the development of European private equity.
The partners spun out the business, originally known as Citicorp Venture Capital, in the early 1990s as an independent buyout shop. It has since grown into an investment giant with 29 offices around the world.
Mackenzie stepped back from an active role in February. Smith retired in 2013 while Koltes did the same in 2022.
CVC’s long-term investors include the Kuwait Investment Authority and Singapore’s GIC. More recently, the New York-based alternative asset manager Blue Owl Capital bought a minority stake in 2021. That deal valued CVC at $11 billion, or $15 billion including debt and a portion of gains from CVC holdings that public investors wouldn’t typically receive, said a person familiar with the matter. That sets a benchmark valuation to measure the success of the IPO.
The firm’s recent record of amassing ever-bigger funds is one reason the IPO is expected to attract investors. Last year, CVC raised €26 billion, then valued at the equivalent of $28.8 billion, for the biggest-ever private-equity fund. Blackstone set the previous record in 2019, raising a $26 billion buyout fund.
Some Blue Owl funds committed to buy up to 10% of shares to be listed, CVC said Monday.
Public investors value listed PE firms on their ability to grow assets, because of the steady and growing fees this business generates. Performance income, from selling investments at a profit, is another source of earnings, but is less highly valued by the market because it is more volatile.
CVC has already bought smaller peers to boost fee-generating assets. In September, it agreed to buy Netherlands-based DIF Capital Partners, which manages more than €17 billion in infrastructure assets.