SSP Group Ltd. said Tuesday that it will launch an initial public offering on the London Stock Exchange. The company wants to raise about £500 million (US$848.3 million) through the offer of new shares. SSP Group said the proceeds will be used to reduce existing borrowings and settle other financial obligations.
“An IPO is the appropriate next step for a business of SSP’s caliber, size and international scale, and we believe that we are well-placed for life as a listed company,” says Kate Swann, CEO of SSP.
SSP is currently 94 percent owned by the Swedish private equity firm EQT, which bought its holding in SSP for £1.8 billion (US$3.05 billion) in 2006.
Les Cappetta, president and CEO of SSP America, calls the move “very positive” for the company’s U.S. operations.
“In the end, we have a private equity firm in EQT that bought into this business in 2006,” Cappetta says. “We went through the recession and did very well during the recession. We kept building when a lot of our competitors stopped building, and we’re actually benefitting from that now.
“This is not a complete divestiture by EQT,” Cappetta continues. “They like the space, they like our recent wins, whether its Doha or Dubai or Beijing or Phoenix. They are very positive about the management team that’s been put in. To me all of this bodes very well.”
Cappetta says SSP America is ready to move full speed ahead, a shift from an earlier stance of curbing its aggressive efforts for new business.
“What happened was, we were awarded so much real estate, so many opportunities in the past few years that I actually reached an agreement with the executives in the U.K that we were going to slow the development process,” Cappetta says. “It took us six years to build a great reputation in the industry and it would probably take about six weeks to tarnish it. So I slowed the pipeline.”
Now, it’s “restarted in a major way,” Cappetta says, noting several recent executive hirings.
“All of this is positioning us to be able to pursue the contracts that are before us right now, which include Orlando, Tampa, Chicago, Seattle to name just a few,” he says.
On a global scale, SSP Group’s most recent results for the six months ended March 31 show a 4.6 percent increase in revenues on constant currency terms and a 12.6 percent increase in underlying EBITDA on constant currency terms.
As of March 31, SSP Group operated 1,981 outlets at 569 sites, including at 125 airports and 271 railway stations. It also operates outlets at motorway service areas, certain leisure locations and hospitals, as well as operating Rail Gourmet, an on-board rail catering business. SSP generates the majority of its revenues from the airport and railway station sectors. The airport sector accounted for approximately 51 percent of revenues in the year ended Sept. 30, 2013, and the railway station sector accounted for approximately 42 percent of revenues in this period.
