MILAN — OVS SpA on Wednesday set the share price in its initial public offering on March 2 at 4.10 euros, or $4.64 at current exchange. The listing will raise about 414 million euros, or $469 million, gross of fees and costs related to the transaction. OVS is floating 45.4 percent of shares, or 101 million shares.
This does not include the greenshoe option.
The IPO will give OVS a market capitalization estimated at about 931 million euros, or $1.05 billion.
“OVS is one of Italy’s national champions. The strong demand from investors to participate in its IPO is testament to its ability to capitalize on the growing demand for value fashion retail in Italy and throughout Europe,” said Nikos Stathopoulos, managing partner of parent company BC Partners.
“I am very pleased to see that an Italian business generated such interest from international institutional investors and retail investors in Italy,” said chief executive officer Stefano Beraldo. According to market sources, the offer was oversubscribed. “On behalf of the OVS team, I would like to thank them, along with BC Partners, for the confidence shown in our company and its future growth prospects.”
OVS is controlled by Gruppo Coin SpA, which is owned by private equity firm BC Partners. Gruppo Coin has granted the joint global coordinators a greenshoe option to purchase up to 11 million additional ordinary shares, or about 11 percent of the ordinary shares in the offering, which can be exercised within 30 days from the first day of trading. If fully exercised, shares floated will represent 49.3 percent of the group’s share capital. The OVS group also owns the Upim mass-market store chain, comprising 255 units nationally.
Through the IPO, OVS plans to strengthen its network of stores.
OVS has been positioning itself as a trendier fast-fashion destination, focusing on a more stylish and higher-quality lineup.
The share price for the OVS road show had been set at between a nonbinding minimum of 4 euros, or $4.53 at current exchange rate, and a binding maximum price of 5.40 euros, or $6.12. This is equal to an indicative price range of the company’s economic capital that is expected to be between a nonbinding minimum of 560 million euros, or $635.2 million, and a binding maximum of 756 million euros, or $857.5 million. The road show went through London, Frankfurt, Boston and New York.
OVS will partly or entirely use the proceeds from the IPO to reimburse the debt derived from a previous financing contract for a total of around 335 million euros, or $381.3 million, according to the prospectus distributed on Monday.
In the fiscal year closed Jan. 31, 2014, OVS’ sales totaled 1.13 billion euros, or $1.28 billion, and earnings before interest, taxes, depreciation and amortization were 132 million euros, or $150.2 million. In the first nine months ended Oct. 31, OVS posted a loss of 20.3 million euros, or $23.1 million, but Beraldo said he expected to turn a profit in the full fiscal year, through lower financial charges and a lower interest rate. In the first nine months, sales rose 7.4 percent, compared with the same period the previous year, reaching 877 million euros, or $998.3 million. Like-for-like sales rose 5.2 percent.
EBITDA rose 29.2 percent to 102 million euros, or $116.1 million, in the nine-month period.
OVS’ debt at the end of October totaled 707.2 million euros, or $805 million. In the first nine months of 2014, OVS opened 31 direct stores and 97 franchised units. Capital expenditures in 2014 totaled around 55 million euros, or $62.6 million.
Banca IMI, BofA Merrill Lynch, Goldman Sachs International and UniCredit Corporate & Investment Banking are global coordinators of the IPO. Credit Suisse and HSBC are acting as joint book runners. Banca IMI is also acting as lead manager of the retail offering and sponsor.