(Adds comments by company, analyst)
* First sizeable IPO on Budapest bourse for years
* Proceeds to finance purchase of Poland’s Link
* Free float to be at least 50 percent
By Krisztina Than and Sandor Peto
BUDAPEST, June 6 (Reuters) - Hungarian road transport firm Waberer’s International plans to raise 50 million euros ($56 million) in fresh capital in a initial public offering (IPO) in Budapest to help finance its purchase of Polish peer Link, Waberer’s said on Tuesday.
The IPO will be the biggest of its kind on the Budapest bourse for several years, giving a shot in the arm to a market currently dominated by four blue-chip stocks.
Waberer’s is one of Europe’s biggest haulage businesses with a fleet of more than 3,500 vehicles, and the IPO could make it the fifth largest company on the bourse.
The IPO will comprise an offering of new ordinary shares and also existing shares held by CEE Transport Holding BV. Waberer’s did not disclose how many existing shares would be sold, but said after the IPO it expected its free float - the proportion of shares traded on the bourse - to be at least 50 percent.
The company said it would use around 32 million euros of the proceeds to help fund the acquisition of Link, with the rest used for working capital and general corporate purposes.
The offering will include a private placement to institutional investors and a public offering in Hungary.
“This is the right time to move forward with our growth strategy ... We see great opportunities in the growing European road transportation industry,” Ferenc Lajko, Waberer’s chief executive, said in a statement.
Waberer’s signed a deal to buy Link in May. The Polish firm has four bases in Poland and one in Belgium.
Monika Kiss, an analyst at brokerage Equilor, said Waberer’s size meant it could attract interest from foreign investors.
She added Waberer’s faced challenges in foreign markets due to Britain’s move to leave the European Union, border controls and a rise in administrative costs, though falling fuel prices and the Hungarian and European economic recovery were a boost.
In 2016, Waberer’s made 572.4 million euros in revenues.
The company is indirectly controlled by funds advised by Mid Europa Partners, a financial investor. Shares held by those funds will be sold via CEE Transport Holding BV, Waberer’s said.
$1 = 0.8890 euros Reporting by Krisztina Than and Sandor Peto; Editing by Mark Potter