(Bloomberg) -- CVC Capital Partners Plc is planning an initial public offering in Zabka Group in what could be Poland’s biggest first-time share sale in at least three years.
The offering in the country’s largest convenience store chain would comprise of only existing shares, according to a statement on its website. The offering will provide CVC an opportunity to partially exit its investment, while giving the retailer access to capital markets in case of potential takeover transactions, according to the statement. CVC’s shares rose to a record in Amsterdam.
The buyout firm will begin a round of investor meetings to set a price range for the sale after the approval of the IPO prospectus. A deal could value the group at as much as $8 billion, people familiar with the matter told Bloomberg News in June.
The Warsaw offering could raise between $1 billion and $1.5 billion, Bloomberg reported then. While Warsaw’s benchmark gauge has slid in recent months, Zabka’s IPO could still be the bourse’s largest since e-commerce operator Allegro.eu SA’s record $2.8 billion offering in 2020 and the $1.1 billion raised by discount retailer Pepco Group NV in 2021.
Europe’s equity capital markets are seeing fresh signs of activity after market volatility and the summer break put a pause on a flurry of IPOs in the first half of the year. Springer Nature, the academic publisher backed by BC Partners, is kicking off a listing this week in Frankfurt.
First-time share sales in the region have raised nearly $15 billion so far in 2024, with the bulk of sales completed in the first five months, according to data compiled by Bloomberg.
CVC bought Zabka from Mid Europa Partners in 2017, in what was then the biggest deal in Poland’s food retail sector. The convenience store chain operates more than 10,000 branches, most of which are run by franchisees, according to its website. It has also recently expanded into Romania after acquiring a controlling stake in consumer goods distributor DRIM Daniel Distributie.
CVC itself listed in Amsterdam this year, raising €2 billion ($2.2 billion) along with its backers. Its shares have risen more than 40% since the April float. CVC is also considering a listing of Spanish clothing retailer Tendam, which it owns along with PAI Partners.
Goldman Sachs Group Inc. and JPMorgan Chase & Co. are leading work on the share sale, according to the statement.
Competition
In Poland, Zabka competes with fast-growing food supermarket chain Dino Polska SA as well as grocery chain Biedronka, which is owned by Portuguese firm Jeronimo Martins SGPS SA. While retailers have benefited recently from increased purchasing power and demand growth, they face pressure from slowing inflation and fierce competition.
Zabka describes itself as a “tech-powered convenience ecosystem,” targeting like-for-like sales growth of 7.5% to 9% year-on-year in 2024, according to the statement. In the first half of the year, same-store sales growth of 10.3% outpaced rivals Dino and Biedronka.
It also said profit margin should be heading close to 13% in the mid-term, while pledging to keep opening more than 1,000 stores every year and doubling sales by 2028.
“An IPO will allow Zabka Group to further capture the significant market opportunity that we see ahead of us,” Chief Executive Officer Tomasz Suchanski said in the statement.
--With assistance from Maciej Martewicz.
(Updates with CVC shares, company targets, comment)
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