Advent preps Rubix for IPO with MS, GS and Rothschild in pole position for advisory roles – sources

21 October 2019 - 10:45 am UTC

by Ryan Gould and Maryna Irkliyenko in London

Private equity firm Advent International is preparing to exit portfolio company Rubix through an IPO in the first half of next year, two sources familiar with the plans told this news service.

 

While advisory roles are yet to be formalised, Goldman Sachs, Morgan Stanley and Rothschild are expected to be appointed for the flotation-led exit, the sources said.

 

An IPO is the most likely option for Rubix, a distributor of industrial supply, repair and overhaul products and services, but discussions regarding a sale would take place on the sidelines to ensure that Advent maximises value, one of the sources said.

 

Rubix’s EBITDA is in the EUR 220m to EUR 250m range, one source and a banker following the deal said. According to its annual report, the company recorded a EUR 190m EBITDA on EUR 2.3bn in sales in 2018.

 

UK-listed Electrocomponents and US-listed Avnet are comparables, the banker said. Avnet bought Leeds-based Premier Farnell, a distributor of products for electronic system design, maintenance and repair, in a deal valued at approximately GBP 691m in 2016.

 

Electrocomponents, which distributes industrial and electronic components, trades at 13x its last annual EBITDA, while Avnet’s EV/EBITDA stands at 7.3x, according to Mergermarket analytics.

 

Applying the average of 10.2x to Rubix’s 2018 EBITDA of EUR 196.5m gives the company an enterprise value of around EUR 2bn. Minus its net debt figure of EUR 1.17bn (as of 31 December 2018), Rubix would have an equity value of EUR 830m.

 

Advent formed Rubix by merging UK-based Brammer with France’s IPH Group, which the sponsor acquired in 2016 and 2017 respectively.

 

Advent has gone through a first phase by combining two businesses and is now thinking of the next steps, the banker following the deal said. There is more to do in terms of digitialising the offering, reducing footprint and thinking about own-label products, he added.

 

Headquartered in London, Rubix specialises in the distribution of supplies for industrial engineering, personal protective equipment, maintenance and power transmission. It operates 650 branches in 23 European countries.

 

Goldman Sachs, Rothschild, Morgan Stanley and Advent declined to comment.