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CVC Lines Up Goldman, JPMorgan, Morgan Stanley for IPO

CVC Lines Up Goldman, JPMorgan, Morgan Stanley for IPO

CVC Capital Partners, one of the oldest and most storied names in European private equity, has lined up banks for a potential initial public offering that could value it at more than $20 billion, people familiar with the matter said.

The buyout firm plans to work with Goldman Sachs Group Inc., JPMorgan Chase & Co. and Morgan Stanley on the stock-market listing, said the people, who asked not to be identified discussing confidential information. It is considering selling shares in London in the second half of the year, the people said. 

A listing of CVC, known for its aggressive dealmaking, would rank as one of the biggest-ever floats of a private equity firm in the U.K. The firm, founded over four decades ago, has in recent years been expanding beyond leveraged buyouts into a range of areas from high-growth tech bets to credit investing and direct lending. 

It’s eyeing the public markets after the successful listings of smaller regional rivals like EQT AB, which has jumped more than sixfold since its 2019 share sale. CVC is moving forward with its IPO plans after most of the major U.S. private equity firms long ago transformed into listed companies, and one of the last remaining holdouts -- TPG Inc. -- completed its stock offering just last week.  

Tea Buyout

Until recently, European buyout groups have tended to remain private partnerships still dominated by their founders or immediate successors. That’s starting to change as firms in the region look for ways to open up to more investors, raise capital and reward employees. 

CVC’s IPO valuation will depend on market conditions and the structure of the listing, including how much of its performance fees CVC would contribute to the public company, the people said. Advisers have discussed a wide range of potential market capitalizations from $20 billion to as high as $40 billion based on peers like EQT, which is valued at $44 billion, and Partners Group Holding AG, currently worth $39 billion.

More banks are likely to be added to CVC’s IPO at a later stage. CVC has not made a final decision on the listing venue and could look at alternative exchanges in Europe, according to the people. Other details of the listing could also change, they said. Representatives for CVC and the banks declined to comment.

Record Fund

CVC has been behind some of the most prominent deals over the past year. It beat out rivals bidders in November to win a deal for Unilever Plc’s tea business, the owner of Lipton and PG Tips, valued at 4.5 billion euros. It’s also been making a big push into the sports world, buying stakes in Spain’s top soccer league as well as Six Nations Rugby.

In the U.S., CVC invested last year in Authentic Brands Group Inc., the parent company of Forever 21 and Nautica. It’s also been active in Asia, agreeing to buy a collection of personal care brands including Tsubaki shampoo from Japanese beauty giant Shiseido Co.

CVC oversees about $165 billion in committed capital, according to its website, having raised a record buyout fund in 2020. Established in the 1980s by a group of venture capitalists including Steve Koltes, Donald Mackenzie and Rolly van Rappard, CVC is majority owned by its employees. It’s known in the industry for its competitive model, where dealmakers working on successful transactions receive a greater share of profits than those whose investments underperform. 

The firm agreed in September to acquire secondary buyout specialist Glendower Capital and also lined up a minority stake sale to Blue Owl Capital Inc. at a $15 billion valuation. The fresh investor and acquisition were seen as CVC paving the way for a future IPO, Bloomberg News has reported. 

CVC has been studying a listing for some time after the IPOs of competitors like London-based Bridgepoint Group Plc. JPMorgan and Morgan Stanley were among those mandated for the IPO of Bridgepoint, while JPMorgan worked on the listing of Goldman’s Petershill Partners Plc business last year. 

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