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Sunday, March 28, 2010

Brenntag Raises $1 Billion in Germany’s Second-Biggest 2010 IPO

The chemicals distributor owned by BC Partners Ltd., raised 747.5 million euros ($1 billion) in Germany’s second-biggest initial public offering since 2007.

Brenntag sold 14.95 million shares at 50 euros each in an IPO that was “multiple times” oversubscribed, the Muelheim, Germany-based company said in a regulatory statement yesterday. The IPO’s per-share price was 11 percent less than the high end of the original range of 46 euros to 56 euros. The stock will start trading tomorrow.

The offering came after Kabel Deutschland Holding AG, Germany’s biggest cable company, raised 759 million euros this month in the country’s largest IPO since Hamburg-based Hamburger Hafen und Logistik AG’s 1.17 billion-euro deal in November 2007. The Stoxx 600 Europe Index’s rally to an 18-month high has helped revive initial sales in the region after Travelport Ltd. and New Look Group Plc postponed IPOs in February.

Brenntag sold 10.5 million new shares and 4.45 million from existing shareholders including an overallotment option. The company plans to use the money raised to expand in emerging markets and finance acquisitions.

Deutsche Bank AG in Frankfurt and Goldman Sachs Group Inc. of New York managed Brenntag’s IPO, along with Charlotte, North Carolina-based Bank of America Corp.’s Merrill Lynch unit and JPMorgan Chase & Co. in New York.

BC Partners bought Brenntag in 2006 for about 3 billion euros, including debt. The chemical distributor has boosted profit by an average of 17 percent over the last five years by expanding in countries from Australia to South Africa.

Water Treatment

Brenntag, which has more than 11,000 employees, distributes acids, solvents and chemicals used in water treatment. The company has more than 10,000 products and 150,000 customers and says it’s the global market leader in full-line chemical distribution. It traces its roots to an egg-wholesaling company founded in 1874.

The European IPO market was slower to recover than the U.S. last year after New York-based Lehman Brothers Holdings Inc.’s collapse in September 2008 spurred a credit-market freeze. American offerings outpaced sales in western Europe by about four times in 2009, data compiled by Bloomberg show.

Private equity-backed deals helped lead last month’s slump in IPOs, as New York-based Blackstone Group LP postponed Travelport’s listing and New Look Group, the Weymouth, England- based fashion retailer owned by Permira Advisers LLP and Apax Partners Worldwide LLP, shelved its offering.

‘Ice Breakers’

The initial sales by Kabel Deutschland and Brenntag may be the “ice breakers” needed to spur more deals this year, New York-based Citigroup Inc. said this month. As many as 10 companies may hold IPOs in Germany, according to Citigroup’s German head of equity capital markets, Andreas Bernstorff.

Kabel Deutschland, Brenntag and African Barrick Gold Plc in London this month have each raised more than the largest U.S. offering of 2010, data compiled by Bloomberg show. All three companies sold shares near the lower end of their price ranges, while U.S. IPOs this month from Carlsbad, California-based MaxLinear Inc. to Financial Engines Inc. of Palo Alto, California, raised more than originally sought.

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