Australia's PEP plans to list paper maker Asaleo for $642 mln

SYDNEY, June 2 Sun Jun 1, 2014 11:05pm EDT

SYDNEY, June 2 (Reuters) - Australian private equity giant Pacific Equity Partners (PEP) plans to follow the country's biggest market listing of the year with its second biggest, saying it wants to raise up to A$690 million ($642.18 million) by listing tampon and toilet paper maker Asaleo Care Ltd.

If it proceeds, the listing of the company with the Libra and Sorbent brands will be the biggest of the year after PEP's sell-down of a 51 percent stake in cleaner-caterer Spotless Group Holdings Ltd for A$995 million last month.

A week ago, PEP also sold ice cream company Peters Food Group Ltd to UK rival R&R Ice Cream Plc for about A$450 million.

Private equity firms are rushing to take advantage of Australia's hot IPO market with a record amount of money raised in the first five months of 2014.

Last week, UBS AG resurrected a A$265 million listing of hotel company Mantra Group after abandoning it two months earlier because of lack of investor demand.

The sale of Asaleo, formerly called SCA Hygiene and jointly owned by PEP and Swedish paper products company Svenska Cellulosa SCA AB, would involve PEP exiting its stake completely while its Swedish partner keeps 31.7 percent and managers keep 1.5 percent, according to the IPO prospectus filed with Australian authorities on Monday.

PEP hopes to sell the remaining two-thirds in a bookbuild later this month for up to A$690 million, giving the company a total market capitalisation of A$1.06 billion. PEP paid Svenska Cellulosa SCA A$250 million for a 50 percent stake in November 2011, according to local media reports.

Since 2012, Asaleo has grown profit by cutting costs and upgrading tissue manufacturing capabilities. It will pursue future profit growth by focusing on more profitable products, the prospectus says.

The company expects net profit growth of 15 percent in the 2014 calendar year, compared with 2013.

The capital raised in the IPO will mostly be used to pay down debt, the prospectus says.

($1 = 1.0745 Australian dollars) (Editing by Matt Driskill)

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