CEVA plans £960m Swiss flotation

CEVA Logistics has unveiled plans for raise CHF 1.3 billion (£960 million) through an initial public offering on SIX, the Swiss stock market.

The IPO, which is planned for the second quarter of 2018, is intended to strengthen the company’s balance sheet and enable it to accelerate its expansion plans.

Chief executive Xavier Urbain said: “Our improving financial results and new business wins are confirmation of the successful execution of our strategy to establish CEVA as one of the global leaders in the asset-light logistics industry. The planned IPO and deleveraging will allow us to open the next chapter in the development of the Company: CEVA will be able to accelerate organic growth and participate in market consolidation. We are executing plans to further improve our profitability significantly and we are confident that we can deliver attractive returns to shareholders.”

The three largest shareholders are currently investment funds managed by affiliates of Capital Research and Management Company, Franklin Advisors, Inc and Apollo Global Management. They said they would maintain an investment in the company after the IPO and have agreed to a lock-up period of 180 days.

CEVA has sales of $7bn in 2017 and adjusted EBITDA of $280m. It employs 56,000 people around the world.

The IPO will allow CEVA to reduce its debt. In 2017, the company had net debt of $2.1 billion, up from $1.9 billion the year before. In 2017, it had a net finance expense of $258m.

The company said: “The planned IPO and deleveraging of the balance sheet to below 3.0x net debt/Adjusted EBITDA is expected to unlock additional growth opportunities with existing and new customers and result in lower finance charges. As a result of deleveraging and anticipated profitability improvements, CEVA expects to generate attractive cash flows.”

The IPO involves CEVA Holdings LLC merging with CEVA Logistics AG, based at Baar in Switzerland, which will become the new holding company. Most of the company’s executive board are already based in Baar, which is a 20 mille drive from Zurich.

A new board of directors will be created made up of new and existing independent members chaired by Prof Dr Rolf Watter who is a partner with the Swiss law firm Bär & Karrer. Presently he is the chairman of PostFinance AG as well as a Board member of Aryzta AG.