STOCKHOLM |
STOCKHOLM Nov 29 (Reuters) – Private equity company
Triton has appointed Deutsche Bank as financial adviser for a
sale, stock market listing or debt refinancing of Swedish
specialty steelmaker Ovako, sources familiar with the matter
said on Tuesday.
Should Triton opt for an initial public offering or a
refinancing, Swedish banks could also become involved in the
deal, the sources said.
As recent wild market movements have dampened appetite for
stocks and corporate debt, an IPO or a recapitalisation to allow
a dividend payout seem the least likely alternatives in the
immediate future.
Ovako’s fortunes improved quickly after Triton took over in
August last year. Triton hired Rothschild earlier this year to
conduct a strategic review of the business.
It had sales of 854 million euros in the first nine months
of 2011, a 40 percent increase from the same period last year,
and reported an EBITDA of 114 million euros in the same period.
Sales volumes were up about one-quarter in the same period.
If Ovako is valued at the same multiples as listed Swedish
peer SSAB the firm would be worth around 1 billion
euros. The price tag of Triton’s purchase last year was not
disclosed but media reports at the time put the deal at some 500
million euros.
The company could attract interest from an industrial or
financial buyer. However, rocky markets and worries about the
health of the global economy have made pricing difficult while
financing has been harder to come by for bigger deals.
Some bankers say a quick sale of a steelmaker like Ovako
could be tough.
Ebbing demand in China, the world’s biggest steel consumer,
and an uncertain global economy have weighed on steel orders.
Ovako said in early November it would reduce production by
15 percent at the start of next year compared with the first
half of 2011 because of weaker demand in several markets.
SSAB AB has said it faced an uncertain outlook
for prices and demand while Finland’s Rautaruukki
trimmed its sales forecast for the year due to the economic
turmoil.
Ovako produces low-alloy and carbon steels in the form of
bars, tubes and rings for heavy vehicle, automotive and
engineering industries.
The business consists of 14 production units mainly in
Sweden and Finland and 7 sales offices in Europe and North
America. Ovako employs around 3,000 people.
Triton manages total investments of around 4 billion euros
from Nordic and international investors.
Rothschild and Deutsche Bank both declined to comment. Ovako
also declined to comment and referred to Triton, which was not
available for comment.
($1 = 0.731 Euros)
($1 = 6.9347 Swedish crowns)
(Reporting by Sven Nordenstam and Mia Shanley; Editing by Helen
Massy-Beresford)