Clearing the path

16 August 2012 By Quentin Webb

Previous attempts to sell or float the Danish cleaning giant flopped. Now two blue-chip investors are taking 500 mln euros of equity in a private deal. ISS will use the proceeds to get rid of costly junk bonds. That means any future listing becomes a smaller, simpler task.

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ISS, the private-equity backed Danish facility services firm, said on Aug. 16 that Ontario Teachers’ Pension Plan of Canada and KIRKBI Invest of Denmark had agreed to buy equity stakes worth about 350 million euros and 150 million euros respectively.
The proceeds will repay ISS’s 11 percent high-yield bonds due 2014. That will reduce the company’s leverage, adjusted for seasonal swings, to 5.15 times EBITDA from 5.86 times. “ISS is on track to significantly deleverage ahead of an IPO within a few years,” Chairman Ole Andersen said in a statement.
The two investors are buying new shares which will give them a combined stake of about 26 percent. The company is currently 54 percent owned by EQT of Sweden, 44 percent by Goldman Sachs Capital Partners, and 2 percent by management.
Shareholder opposition forced G4S, the British security firm, to abandon a planned takeover of ISS in November. In March 2011 ISS cancelled a Copenhagen flotation, blaming market volatility following the Fukushima nuclear disaster in Japan.
OTPP manages nearly $120 billion in assets. KIRKBI is the majority owner of Lego and is owned by Denmark’s Kirk Kristiansen family. Kjeld Kirk Kristiansen, whose grandfather founded Lego, is the country’s richest man, with an estimated net worth of $6 billion, according to Forbes.

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