ISS Plans $2.4 bln IPO to Pay Down Debt

Denmark’s ISS is looking to raise around $2.4 billion from a stock market listing in which its private equity owners will keep their shares in the outsourcing group and use the funds to pay down debt.

The initial public offering (IPO) on the Copenhagen bourse would be Europe’s biggest so far this year.

The company, one of the world’s biggest private-sector employers with more than 500,000 workers, said on Thursday its planned 13.3 billion Danish crown ($2.4 billion) float would be made up almost entirely of new shares.

Last month, ISS’s owners Goldman Sachs and Swedish buyout firm EQT broke off talks on an $8.5 billion takeover by private equity firm Apax after they disagreed over the price. An IPO then looked likely, but the owners were expected to at least partially exit the business.

A source close to the deal said that less than 5 percent of the shares offered would be existing, sold as part of a management share scheme.

Reporting its 2010 full year results on Thursday, ISS said revenue had grown 7.3 percent from 2009 to 74.1 billion Danish crowns, driven mainly by growth in emerging markets, and predicted revenue growth of around 4 percent this year.

“We expect to spend about half a billion crowns per year on acquisitions, mainly in emerging markets,” Chief Financial Officer Jakob Stausholm said on a conference call.

ISS, which operates in more than 50 countries, cleaning offices, cooking school meals, running hospitals and providing security for people and properties, has grown briskly in emerging markets, including the security market in India where in 2010 it acquired SDB Cisco Ltd with 27,000 employees.

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