May 28, 2014 / 6:55 AM / in 4 years

French caterer Elior aims to raise $1.2 billion in market debut

PARIS (Reuters) - Europe’s third-largest catering group Elior said it aimed to raise at least 845 million euros ($1.2 billion) in an initial public offering (IPO) and would use the proceeds to cut debt and fund further expansion, notably in the United States.

The company, which competes with France’s Sodexo and Britain’s Compass, set a price range for its IPO of 14.35 to 17.50 euros per share on Wednesday and said it expects to make its debut on the Paris bourse on June 11.

Elior is one of largest new listings on the French bourse this year along with Coface, the trade credit insurance unit of French bank Natixis, European exchange Euronext, energy services group Spie and Atos Worldline, the payment and transactions processing unit of IT service company Atos.

Chief Financial Officer Olivier Dubois said the listing would value Elior at 2.4-2.8 billion euros and that following the IPO, between 31 and 35.4 pct of the capital, excluding an overallotment option, would be traded on the market.

Elior plans to sell new shares and about 60 million euros worth of shares from existing holders including Charterhouse, Chequers, Bagatelle Investissement et Management, Intermediate Capital Group and Sophia Global Investment.

The offering includes an over-allotment option of up to 15 percent of the total number of new and existing shares being sold. The price is due to be set on June 10, Elior said.

“This IPO will enable us to pursue our profitable growth strategy, based on both organic and external growth,” Chief Executive Gilles Petit said in a statement.

Elior has said it expects to achieve 3.5 percent annual organic sales growth from 2015 to 2017.

Including planned acquisitions, notably in the United States, Elior said it aimed for annual consolidated sales growth of around 7 percent during the period.

The company was first listed in 2000 and de-listed in 2006 when Charterhouse Capital Partners [CHCAP.UL] bought it for 2.5 billion euros. The UK private equity group owns 62.4 percent of Elior, co-founder Robert Zolade has 24.7 percent and Chequers Capital holds 7.8 percent.

($1 = 0.7345 Euros)

Reporting by James Regan; Editing by Erica Billingham

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