Polypipe reveals intention to float

PLASTIC piping manufacturer Polypipe has announced its intention to float on the London Stock Exchange.

Doncaster-based Polypipe which employs about 2,000 people, claims to be the largest manufacturer in the UK, and among the ten largest manufacturers in Europe, of plastic piping systems for the residential, commercial, civils and infrastructure sectors by revenue.

According to reports, Polypipe, which operates from 16 sites, with operations in Doncaster, Loughborough, France, Italy and the Middle East, is seeking a valuation of more than £400m.

The group said that its strong market positions, breadth of product systems and diversified and localised distribution base, coupled with its experienced and stable management team, have enabled the group’s UK operations to outperform the UK construction market since 2008.

Polypipe, which has invested around £130m into its business since late 2005, reported revenue of £300.8m and adjusted EBITDA of £54m in 2013 and today said it has made a positive start in the first two months of 2014, with its results ahead of those of the same period in the prior year, as well as budget, it said.

David Hall, chief executive officer of Polypipe, which was founded in 1980, said: “I am delighted to be leading Polypipe’s return to the public markets after an important phase of structural improvements under the current owners. Our business has emerged strongly from the construction downturn and is now well-invested and well positioned to take advantage of new market opportunities.

“The structural trends in our market – the substitution of legacy piping materials for modern plastic systems and regulatory support for carbon efficiency and water management solutions – provide a strong basis for continued growth in the coming years.”

Polypipe is backed by Cavendish Square Partners, a joint venture fund set up by Coller Capital and Lloyds Banking Group. The fund is managed by private equity group Caird Capital.

Polypipe’s chairman, Alan Thomson, added: “Polypipe is a proud British manufacturing company and the flotation provides an opportunity for investors to enter a sector primed for long-term growth.

“The company has a great corporate culture, reinforced by the fact that a large number of Polypipe’s management are also equity shareholders in the business. This has the advantage in the market of aligning management to long-term value creation and is one of the key reasons why the business has emerged stronger than its competitors following a tough few years.”

It is expected that the admission will take place in April.

Deutsche Bank AG, London Branch and Numis Securities are acting as joint sponsors and joint bookrunners. Canaccord Genuity is acting as co-lead manager. Moelis & Company UK is acting as financial adviser to the company.