Bridgepoint seeks US$2.8b valuation in rare buyout firm IPO

[LONDON] Buyout group Bridgepoint plans to raise about £300 million (S$558.4 million) in one of the biggest listings of a UK private equity firm in decades.

The firm intends to list at least a quarter of its shares, according to a statement on Tuesday. The offering, which is expected to value the firm at about £2 billion, will also include the sale of about £200 million of existing stock, according to a person familiar with the matter.

Unlike the US, where firms like Blackstone Group and KKR & Co went public more than a decade ago, British buyout groups have tended to remain small private partnerships still dominated by their founders or immediate successors. Closely held firms have been grappling with how to provide exits for founders, while also ensuring rising stars can monetise their stakes in the firm.

Middle market firms like Bridgepoint have also faced increasing pressure to diversify their offerings as they face greater competition that's pushing up the cost of acquiring assets and pressuring returns. The buyout firm sold an undisclosed minority stake to what was then Dyal Capital Partners in 2018.

Bridgepoint plans to use at least some of the funds to expand into new strategies including infrastructure and real estate as well as to increase its presence in the US, according to the person familiar with the matter, who asked not to be identified discussing confidential information. The firm expanded into private debt markets with its purchase of EQT AB's credit business last year.

At £2 billion, Bridgepoint, which was carved out of Royal Bank of Scotland Group in 2000, would rank among the biggest private equity businesses listed on the London Stock Exchange. The two largest, 3i Group and Intermediate Capital Group have a combined market capitalisation of almost £18 billion and both went public in 1994.

Listed peers in Europe include EQT, the largest buyout firm in the Nordic region, which made its trading debut in Stockholm less than two years ago, and Switzerland's Partners Group Holding and France's Eurazeo.

Bridgepoint, which has more than 27 billion euros of assets under management, last week took a minority stake in Itsu, the Asia-inspired food company, and in May teamed up with Astorg to buy Irish financial software company Fenergo. In March it agreed to sell a business called Calypso to Thoma Bravo in a deal that Bloomberg reported was valued at about US$3.7 billion. That made it one of the biggest software deals in Europe this year.

Buyout firms have splurged US$17 billion on takeovers of publicly traded British targets so far in 2021, the busiest start to a year since 2007. The deals mark a catch-up after some large global private equity funds avoided the UK in recent years. The country has endured some of the harshest Covid lockdowns, while dealing with supply chain and trade flow fears sparked by uncertainties about how Brexit would impact the country's economy.

The firm is also well known in the UK as an investor in Pret A Manager, a chain of sandwich shops. It sold that stake in 2018 to JAB, another investment firm.

Bridgepoint said total operating income rose to £191.8 million in the financial year 2020 from £144.8 million in 2018. "Significant further profitable growth" has been achieved in the first quarter of 2021, it said.

BLOOMBERG