DFS Furniture valued at up to £654m in IPO

London

DFS Furniture Ltd will be valued at as much as about £654 million (S$1.34 billion) when the UK sofa retailer returns to the London stock market for the first time in more than a decade.

The company, owned by private-equity firm, Advent International Corp, will offer shares at a price of 245 pence to 310 pence apiece, it said in a statement on Monday. At the mid-point of the range, DFS will be valued at £585 million, according to the statement. Final pricing is expected on or around March 6, DFS said, with listing on March 11.

DFS said earlier this month it planned to file for an initial public offering (IPO) to reduce its indebtedness. Berenberg and HSBC are co-lead managers.

DFS is the latest retailer seeking to sell shares in the UK, on the heels of a year when companies raised about US$6 billion from London IPOs, the most in over a decade, data compiled by Bloomberg shows. Smaller competitor ScS Group Plc returned to the stock market in January with a listing that valued the company at £70 million.

DFS's IPO will raise about £98 million for the company, which will be used to reduce debt and provide access to cheaper financing. Funds managed by Advent will also sell some shares. Including a possible over-allotment option, the maximum size of the offer is £296 million, DFS said.

DFS says it is leader of the £3 billion UK upholstery market with a 26 per cent share. Founded by Graham Kirkham in 1969, the retailer was acquired by Advent in 2010. Prior to that, it spent more than 10 years as a listed company before being taken private by Mr Kirkham in a 2004 deal that valued the company at £507 million.

It posted revenues of £674.6 million for the 12 months to Nov 1 and adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) of £85.2 million, at a margin of 12.6 per cent. "Our vision is to take DFS from being a great British business to a world-class business," CEO Ian Filby said in the statement. BLOOMBERG, REUTERS