July 14, 2015 / 2:14 PM / 2 years ago

Exclusive: EQT eyes $2 billion listing of Sweden's Dometic - sources

LONDON/STOCKHOLM (Reuters) - Swedish investor EQT is looking to list Dometic in a deal that could value the company, which makes fridges and cookers for caravans and boats, at about $2 billion including debt, three sources said on Tuesday.

EQT is working with Lazard (LAZ.N) to prepare the market listing for Dometic, which had earnings before interest, taxes, depreciation and amortization (EBITDA) of 1.36 billion crowns ($156 million) in the year to March 31, 2015, the sources said.

The Swedish company has had a checkered history with private equity. Lenders took over Dometic from former owner BC Partners in 2009, when it struggled to repay its debt. Since buying the firm in 2011, EQT has had to inject more capital.

Bankers say Dometic could trade at a similar multiple to earnings as Sweden's Thule (THULE.ST), another company that caters to the leisure industry and that was listed by Nordic Capital last year.

Thule is trading at about 14 times forecast core earnings for 2015, according to Thomson Reuters data. A similar multiple for Dometic could give that business an enterprise value of up to $2.2 billion.

EQT and Lazard declined to comment.

An initial public offering (IPO) could take place as soon as the last quarter of this year, but is more likely to be in early 2016, another source said, cautioning that no deal was certain.

DEBT PILE

The total value of shares sold in IPOs in Denmark, Finland, Norway and Sweden was almost $5.3 billion in the first half of this year, up more than 6 percent on the same period last year. The countries accounted for 13.9 percent of the value of shares sold in IPOs across Europe, up from 10.3 percent last year, according to Thomson Reuters data.

At a valuation of $2.2 billion, it would be the second largest company to float this year after Swedish hotel property firm Pandox (PANDXb.ST), which listed in June and has an enterprise value of 20.8 billion crowns, according to Thomson Reuters data.

The main list on the Stockholm stock exchange had 12 IPOs in the first six months of 2015, up from seven a year ago. Most of the newcomers have performed better than the broader market.

Dometic had net debt of 9.18 billion crowns as of March 31, leaving it with a high net debt to EBITDA ratio of 6.7.

In June 2014, it amended the terms of its senior debt facilities and raised a new 314 million euro ($346 million)payment in kind bond with 9.50 percent interest.

An equity listing could allow Dometic to repay this deeply subordinated debt, with the breakage costs associated with redeeming the bond before maturity dropping significantly from June 2016.

In 2012 and 2013, EQT put 625 million crowns of extra cash into the business and converted a 1.1 billion crown shareholder loan into equity. EQT then injected 1 billion crowns of equity when Dometic acquired Atwood Mobile Products in September 2014.

EQT previously owned the business 2001 to 2005 after buying it from appliance maker Electrolux (ELUXb.ST). After an unsuccessful attempt at listing in 2003, the private equity fund sold Dometic to BC Partners two years later.

Additional reporting Arno Schuetze in Frankfurt, Pamela Barbaglia in London and Robert Smith at IFR; editing by David Clarke

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