Denmark’s statutory pension fund ATP intends to remain a shareholder in the Danish payments firm Nets following the IPO the firm has just announced, with the fund saying its investment in the company had made very good returns.
Carsten Stendevad, outgoing chief executive of the DKK800bn (€107bn) pension fund, said: “The transformation of Nets has exceeded our expectations by far and has been a very lucrative investment for our pensioners.
“We look forward to supporting Nets in the next phase and we will continue as shareholders,” he said.
Nets, which provides digital payment services and related technology in the Nordic region, announced yesterday it would launch an IPO (Initial Public Offering) of its shares and list on Nasdaq Copenhagen.
The IPO is expected to consist of an issue of new shares to raise around DKK5.5bn, and a partial sale of existing shares by its current shareholders.
ATP has a 5% stake, and private equity houses Advent International and Bain Capital have around 43.5% apiece.
The rest of the equity is held by other co-investors and members of Nets management and staff.
The IPO will form part of a debt restructuring, with the proceeds pooled with new bank borrowing and used to repay existing debt, the company said.
Nets said it would announce the total offer size when it publishes a prospectus.
ATP invested DKK3.6bn in Nets back in March 2014, as part of a joint venture with Advent International and Bain Capital to purchase Nets for DKK17bn.
ATP’s investment consisted of DKK300m in equity and a loan of DKK3.3bn in the form of a high-yielding PIK (payment-in-kind) note — a type of mezzanine financing.
A Danish newspaper has reported the yield on this loan to be 14%, but a spokesman for ATP said he could not confirm this.
Nets was previously owned by more than 180 separate banks.
Advent International also said it was pleased - “delighted” - with the progress Nets had made over the past two years.
“When we made our initial investment, we envisioned a future listing when Nets was ready,” said James Brocklebank, a managing partner at the private equity firm and member of the Nets board of directors.
“The company has exceeded its ambitious performance targets and done so faster than expected, so we are now executing on our plan,” he said.
The Nets investment makes up nearly 4% of ATP’s DKK97bn return-seeking investment portfolio.
ATP reported big profits from another of its large private equity investments last week, with its investment in DONG Energy boosting half-year returns on its investment portfolio to the tune of DKK2.9bn in the six-month period alone.