Corporate | 27 September 2017 07:55
VARTA AG resumes plans for an initial public offering (‘IPO’)
|
DGAP-News: VARTA AG / Key word(s): IPO
Not for release, publication or distribution in or into
VARTA AG resumes plans for an initial public offering (“IPO”) – Listing in 2017: VARTA AG plans to list its shares on the prime standard segment (regulated market) of the Frankfurt Stock Exchange yet this year – Electrifying: global expert for microbatteries and one of the global leaders for hearing aid batteries; massive demand: small batteries for the new generation of wireless headphones – Tailwind: profiteer of the trend towards decentralized energy supply as part of the German energy turnaround – Convincing track record: from 2014 to 2016, revenue has increased, on average, by approximately 12.5 percent per year; EBITDA margin has remained on a steady high level – Growth push: a significant majority of the IPO proceeds to be used to expand production capacity
VARTA AG intends to list its shares on the regulated market of the Frankfurt Stock Exchange (Prime Standard) yet this year. VARTA AG is a global expert for microbatteries with a dominant market position in hearing aid batteries capitalizing on highly attractive growth opportunities in hearables and power pack solution markets. New shares from a planned capital increase with total gross proceeds of approximately EUR150 million as well as existing shares from the holding of the indirect sole shareholder, Montana Tech Components AG, are expected to be offered in the IPO. The final placement volume has yet to be determined. Additional shares to cover potential over-allotments of up to 15 percent of the base offering will also be made available by the existing shareholder. After the IPO, the target free float is expected to be approx. 40 percent. “Our everyday devices are getting smaller and wireless. This is a booming market. We benefit from the technological progress. It leads to strong demand for small batteries with high energy density and reliability. We are a leading global expert in this field, and with our lithium-ion batteries, we have the finger on the pulse. As a result, the rapidly growing demand for our products is such that we need to substantially expand production capacity. This provides us with tremendous momentum and is a clear testimony of the appeal and quality of our products,” says Herbert Schein, VARTA AG CEO. “With the capital raised from the planned IPO, we intend to boost growth in this area again. We want to utilize this momentum to accelerate our growth and benefit sustainably from the huge potential in the market.” High potential for energy solutions in a wireless world Batteries are increasingly becoming a strategic component for performance and quality. Small devices like headphones, other so-called wearables or entertainment electronics require intelligent and high-quality batteries in a small space. Tools or home and garden devices require powerful battery packs. These devices are more and more shaping our day-to-day life with ever less space for cables. At the same time, the number of energy self-supporters grows day to day. To make efficient use of energy, for example generated by solar panels on the roof of private homes, storage capabilities are necessary. VARTA AG capitalizes on both of these trends with its operative subsidiaries VARTA Microbattery GmbH and VARTA Storage GmbH, benefiting from its know-how in the business with hearing aid batteries. VARTA Microbattery – energy within the smallest place With its Microbatteries segment (VARTA Microbattery GmbH), VARTA AG provides an increasing number of compact, intelligent, wireless and connected devices with energy. VARTA AG already has a particularly strong presence in the market for wireless headphone batteries. As small lithium-ion batteries are installed permanently in many devices, quality and reliability in combination with high energy and power density are decisive – areas in which the company benefits from longstanding know-how: already today, the company’s microbatteries help to ensure that approximately 25 million people globally are able to reliably hear again. An aging society and increasingly more convenient hearing aids have for years led to continuous market growth for the batteries needed for these devices and have allowed for very stable margins. Thanks to an increase in the energy density of its products, VARTA AG has become one of the global market leaders in this segment. Through quality and technology, VARTA AG has been successful in a persistently fierce competitive environment, even winning over previous competitors to become customers. A proof for the successful transfer to the wearables and hearables business is the recent significant increase in demand. VARTA AG has historically generated over three quarters of its revenue in the Microbatteries segment. Between 2014 and 2016, revenue in the Microbatteries segment increased by approximately 29 percent to approximately EUR177 million and, in the first half of 2017, amounted to approximately EUR101 million (1HY 2016: around EUR88 million). VARTA Power & Energy – intelligent battery solutions The Power & Energy segment (VARTA Storage GmbH) offers intelligent battery solutions (smart battery solutions) for a variety of applications and retail markets. This business also benefits from an increasing demand for wireless energy solutions. VARTA Storage’s mobile energy sources bring ever more devices to life, from vacuum cleaners to drilling machines. Moreover, there is an increasing demand for stationary energy storage systems, which represent a critical element of the German energy turnaround. VARTA Storage supports private households in efficiently using self-generated electricity as well as commercial clients in the areas of emergency power management and grid stability. Revenue in the Power & Energy segment for fiscal year 2016 was approximately EUR35 million and has increased by around 20 percent since fiscal year 2014. For the first half of 2017, revenue in the Power & Energy segment was around EUR19 million (1HY 2016: around EUR17 million). Innovative capability and battery expertise as enablers VARTA AG systematically invests in research and development of new technologies. An important focus of research is on continuing to increase the performance of its products. The company is currently working on a new generation of batteries by increasing the energy density of small lithium-ion batteries. With its 130 years of experience in battery technology, the company has the expertise to transform high-quality innovations into highly-automated mass production. VARTA AG has gained a significant competitive advantage by building vital machinery itself, which enables the company to easily adapt it to its own needs. Historically profitable growth achieved As a result of its strong market position and sustained trends towards energy storage systems and mobile energy use, VARTA AG achieved strong and profitable growth over the past years. From 2014 to 2016, revenue increased on average by around 12.5 percent per year; in 2016, VARTA AG generated revenue of approximately EUR214 million. During this time, the adjusted [1] EBITDA margin was continuously high; in 2016, it was around twelve percent. Due to high capacity utilization in the Microbatteries segment, the company once again posted significantly higher earnings in the first half of 2017 as compared to the first half of 2016. While revenue increased to around EUR120 million in the first half of 2017 (1HY 2016: around EUR106 million), adjusted EBITDA rose to around EUR19.4 million (1HY 2016: around EUR10.2 million); the EBITDA margin rose accordingly to 16.2 percent over the same period (1HY 2016: 9.6 percent). “We are at the forefront of attractive markets,” says Dr Michael Pistauer, CFO. “The strong demand in these markets has led to a record result for us in the first half of 2017. However, we do not intend to sit back and relax after this. Instead, we aim to both accelerate our growth and further improve earnings through targeted investments.” Long-term major shareholder Montana Tech Components AG is the indirect sole shareholder of VARTA AG. It will remain the majority shareholder of the company after the IPO and plans to hold a majority in the long term. DDr. Michael Tojner, CEO and majority shareholder of Montana Tech Components AG, says: “The VARTA AG management has done an excellent job over the past years. They have led the company to be a leader in the market for hearing aid batteries and positioned innovative products for strong future growth. Hardly anyone would have predicted that after VARTA was split up almost 15 years ago. We, as shareholders, intend to continue our support of this growth.” Proceeds foster growth VARTA AG intends to use most of the expected gross proceeds of EUR150 million generated from the IPO to expand production capacity of its operating subsidiaries, mainly in Germany. The company intends to use around EUR80 million for the expansion of production capacity for rechargeable lithium-ion microbatteries and around EUR30 million to install a new production line for zinc-air hearing aid microbatteries. In this area, VARTA AG has already increased its capacities on a continuous basis in the past to serve the lasting growth in the hearing aid market. In the Power & Energy segment, VARTA AG intends to use approximately EUR20 million to invest in battery assembly plants in line with the project pipeline and strengthen its expertise particularly in software and electronics via a potential acquisition. The remainder will be used for general corporate purposes. The offering is expected to consist of a public offering in Germany and Austria as well as private placements outside of Germany and Austria, including a private placement to qualified institutional investors in the United States of America [2] . A twelve-month lock-up period will apply for the company and the CFO; a 24-month lock-up period will apply for both the CEO and the existing shareholders. Joh. Berenberg, Gossler & Co. KG will act as Sole Global Coordinator and jointly with UniCredit Bank AG as Joint Bookrunner.
Corinna Hilss
As the parent company of the Group, VARTA AG is active in the business segments Microbatteries and Power & Energy through its operating subsidiaries VARTA Microbattery GmbH and VARTA Storage GmbH. Already today an innovation leader in the microbattery sector and one of the market leaders for hearing-aid microbatteries, VARTA Microbattery GmbH also aspires to market leadership for lithium-ion batteries in wearables and particularly headphones. VARTA Storage GmbH focuses on intelligent energy solutions for customized battery storage systems for OEM customers and the design, system integration and assembly of stationary lithium-ion energy storage systems. The VARTA AG Group’s operating subsidiaries are currently active in more than 75 countries around the world, with five production and assembly facilities in Europe and Asia as well as distribution centers in Asia, Europe and the United States. Important note: This document does not contain or constitute an offer of, or the solicitation of an offer to buy or subscribe for, securities to any person in Australia, Canada, Japan, or the United States of America or in any jurisdiction to whom or in which such offer or solicitation is unlawful. The securities referred to herein may not be offered or sold in the United States of America absent registration under the U.S. Securities Act of 1933, as amended (the “Securities Act”), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Subject to certain exceptions, the securities referred to herein may not be offered or sold in Australia, Canada or Japan or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada or Japan. The offer and sale of the securities referred to herein has not been and will not be registered under the Securities Act or under the applicable securities laws of Australia, Canada or Japan. There will be no public offer of the securities in the United States of America. Neither VARTA Aktiengesellschaft (the “Company”) nor any of its shareholders intends to register any securities referred to herein in the United States of America. Any offer will be made exclusively through and on the basis of a prospectus that must be published in Germany, as supplemented by additional information related to the offer outside of Germany. No money, securities, or other consideration is being solicited, and, if sent in response to the information contained herein, will not be accepted. This document is directed at and/or for distribution in the United Kingdom only to (i) persons who have professional experience in matters relating to investments falling within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (ii) high net worth entities falling within article 49(2)(a) to (d) of the Order (all such persons are referred to herein as “relevant persons”). This document is directed only at relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents. Any investment or investment activity to which this document relates is available only to relevant persons and will be engaged in only with relevant persons. Joh. Berenberg, Gossler & Co. KG and UniCredit Bank AG are acting exclusively for the Company and the selling shareholder and no one else in connection with the contemplated offering referred to herein. They will not regard any other person as their respective clients in relation to such offering and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients, nor for providing advice in relation to the offering, the contents of this announcement or any transaction, arrangement or other matter referred to herein. Joh. Berenberg, Gossler & Co. KG and UniCredit Bank AG are authorized and regulated by the Bundesanstalt für Finanzdienstleistungsaufsicht and also supervised by the European Central Bank. This document contains forward-looking statements. These statements are based on the current views, expectations, assumptions and information of the management of the Company. Forward-looking statements should not be construed as a promise of future results and developments and involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those described in such statements due to, among other things, changes in the general economic and competitive environment, risks associated with capital markets, currency exchange rate fluctuations, changes in international and national laws and regulations, in particular with respect to tax laws and regulations, affecting the Company, and other factors. The Company does not assume any obligations to update any forward-looking statements. This document is an advertisement and not a prospectus. Investors should not purchase or subscribe for any shares referred to in this document except on the basis of information in the prospectus to be issued by the company in connection with the offering of such shares. Copies of the prospectus will, following approval of the German Financial Supervisory Authority (BaFin) and publication, be available free of charge from Varta AG, Daimlerstraße 1, 73479 Ellwangen, Germany or on Varta AG’s website (www.varta-ag.com).
[2] Pursuant to Rule 144A under the U.S. Securities Act of 1933, as amended.
27.09.2017 Dissemination of a Corporate News, transmitted by DGAP – a service of EQS Group AG.
|
| Language: | English |
| Company: | VARTA AG |
| Daimlerstraße 1 | |
| 73479 Ellwangen | |
| Germany | |
| Phone: | +49 (0)791-921-0 |
| E-mail: | info@varta-ag.com |
| Internet: | www.varta.com |
| End of News | DGAP News Service |