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UPDATE 1-Shares in German car parts maker Stabilus rise on debut
May 23, 2014 / 10:22 AM / 3 years ago

UPDATE 1-Shares in German car parts maker Stabilus rise on debut

* Stabilus shares rise 9 percent on debut

* Price range was 19-25 eur/shr, offer price 21.50 eur/shr

* More IPO activity expected in Germany in summer

* Stabilus could be included in SDAX in September (Adds shares, details, background, comments)

FRANKFURT, May 23 (Reuters) - Shares in German automotive and industrial supplier Stabilus rose 9.2 percent on their first day of trading in a sign investors are growing more confident about investing in German market debuts.

The stock started trading at 22.75 euros on Friday, above the offer price of 21.50 euros. It had risen as high as 23.48 euros by 1005 GMT.

While Britain has seen a surge in new issues in recent months, with 31 companies raising $7.5 billion so far this year, up 162 percent on last year, Germany had previously only seen one initial public offering (IPOs).

3D printer maker SLM raised 180 million euros ($246 million) in its debut earlier this month.

More IPOs are expected in the coming months, with German roofing company Braas Monier seen next in line.

Stabilus makes gas springs and hydraulic dampers which are used to determine how fast a trunk lid opens or to individually adjust the height of swivel chairs.

The IPO of Stabilus yielded roughly 260 million euros. The company plans to use the 65 million euros it reaped from a capital increase to pay down debt. Buyout group Triton, which reduced its stake to 41 percent with the transaction, agreed not to sell further shares within the next six months.

“Our goal is clear: we hope to move up to Germany’s small cap index SDAX soon,” Chief Executive Dietmar Siemssen said after ringing the bell when the first share price appeared on screen at the Frankfurt Stock Exchange.

Index tracking experts expect Stabilus to take Air Berlin’s SDAX place in the September review.

“Stabilus’ free float market cap will secure them a spot in the middle of the field among SDAX companies and trading volumes will likely also be sufficient,” said Klaus Stabel from ICF Kursmakler.

At the issue price, Stabilus had a market capitalisation of 445.6 million euros.

Stabilus, which has a 70 percent market share in automotive gas springs, plans to keep an edge over competitors, which include Brose and Edscha, by continuing to use 7.5 percent of revenues for capital spending.

The company plans to pay out 20 to 40 percent of its profits as dividends from its fiscal year 2014/2015 starting in October.

In 2013, Stabilus posted a net income of 25.8 million euros and earnings before interest, tax, amortization and depreciation of 75.9 million euros on sales of 460 million euros.

Triton took control of Stabilus in 2010 after the company - burdened with debt by its private equity owner Paine & Partners - breached its loan covenants. It injected fresh equity and agreed to waive some of Stabilus’ debt which it had acquired.

Commerzbank and J.P. Morgan organised the IPO with the help of Societe Generale and UniCredit.

$1 = 0.7323 Euros Reporting by Arno Schuetze and Alexander Hübner; Editing by Mark Potter

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