German web hosting firm IONOS targets IPO value of up to $3.4 billion
By Hakan Ersen, Pablo Mayo Cerqueiro and Emma-Victoria Farr
BERLIN/LONDON (Reuters) -German web hosting firm IONOS is targeting a market capitalisation of up to 3.15 billion euros ($3.42 billion) in Europe's first major initial public offering (IPO) since sports car maker Porsche last September.
United Internet and its minority private equity partner Warburg Pincus are each offering 15% of their respective holdings in IONOS at 18.50 euros to 22.50 euros a share, resulting in total proceeds of up to 543 million euros.
Subject to regulatory approval of the IPO prospectus, the offer is expected to run from Jan. 30 to Feb. 7. The stock will debut on the Frankfurt bourse the following day.
If all the shares are sold, IONOS will have a free float of 17.3%, the company said in a statement on Friday.
A formal investor education process launched 10 days ago with the publication of an intention to float document.
"The positive feedback we received from numerous investors reinforces our belief that the IPO will strengthen our successful growth trajectory," IONOS CEO Achim Weiss said.
"We look forward to discussing our bright future with investors in the coming weeks."
U.S. peer GoDaddy served as the reference point in discussions with investors to determine the IONOS price range, two sources close to the deal told Reuters.
IPO investors are typically offered a discount to a peer group in compensation for the risk of buying a new stock.
Investors demanded not just a discount on valuation common in IPOs, but an "icebreaker discount", being the first major deal of the year, a third source said.
Including debt, GoDaddy trades at around 14 times estimated earnings before interest, taxes, depreciation and amortisation (EBITDA) for the next 12 months, Refinitiv data shows.
IONOS is expected to generate EBITDA in the region of 380 million euros for 2023, a fourth source added.
Montabaur-based IONOS offers web hosting services and cloud applications to consumers and SMEs in countries including the United States, Germany, Britain, France, Spain and Poland.
It was created in October 2018 through the merger of 1&1 Internet and ProfitBricks.
($1 = 0.9204 euros)
(Reporting by Hakan Ersen, Pablo Mayo Cerqueiro and Emma-Victoria Farr; writing by Miranda Murray; editing by Kirsti Knolle and Alexander Smith)