After 10 years of absence, the return to listing (IPO) of SIG Combibloc promises to be the most important of the year for the Zurich market, with an expected capitalization of between 3.4 and 4.1 billion francs.
SIG Combibloc aims to grow faster than the market and nothing less than to dethrone the current leader Tetra Pak in terms of market share. In the medium term, the group based in Neuhausen am Rheinfall is targeting annual growth of 4 to 6%, against 3.6% expected on average for the market, explains its Managing Director (CEO) Rolf Stangl. As for SIG’s share, it varies from 15 to 25% depending on the market. “We are clearly number two,” said the leader. According to him, the company still has potential in several regions, thanks in particular to its technologically advanced products.
In terms of profitability, the Schaffhausen group aims in the medium term to stabilize at the current level (adjusted EBITDA margin: 29%). The marked improvement in margins in recent years can be attributed to additional production sites in emerging countries, which have made it possible to reduce costs, said Chief Financial Officer (CFO) Samuel Sigrist. As a reminder, the stock SIG was withdrawn from the listing on SIX about ten years ago, after the takeover of the group by the New Zealand magnate Graeme Hart, who subsequently sold it in 2014 to Onex. for 3.75 billion euros.
Specific business model
The business model of the Schaffhausen specialist in sanitized packaging for the food industry has a few particularities. “We only achieve 10% of our turnover from the sale of machines”, underlined Rolf Stangl. Most of the revenue comes from the sale of cardboard beverage packaging that customers contractually commit to purchase in the years following the purchase of the machines. The containers are manufactured in eight factories around the world.
Composed of several layers of various materials, they are concentrates of technology. “We guarantee a shelf life of 12 months without refrigeration”, assures the CEO, which allows for example a Dutch dairy farmer to sell its products in North Africa.
IPO with deleveraging
The offering will include up to 113 million new shares, in addition to the existing 27 million. It is accompanied by an over-allotment option of up to 21 million existing shares. The price range has been set between 10.50 and 13.50 francs per unit, which corresponds to an investment volume of approximately 1.5 billion francs and a market capitalization of between 3.4 to 4, 1 billion, making the largest IPO transaction since the start of the year.
The net proceeds from the issuance of the new securities will be used for debt reduction purposes. The free float should amount to 42.7% after the transaction, and could reach 49.1% in the event of full exercise of the over-allotment option. In all cases, the owner, the Canadian private equity firm Onex, will remain the majority shareholder of the group.