Bloomberg News

KKR, Goldman Said to Eye Kion IPO for Second Quarter

October 23, 2012

KKR & Co. (KKR:US) and Goldman Sachs Group Inc. (GS:US) plan an initial public offering of Kion Group GmbH, the world’s second-largest maker of forklifts, in the second quarter of 2013, according to people familiar with the matter.

Kion’s owners are likely to choose banks to advise on the Frankfurt IPO alongside Goldman Sachs by the end of November, said the people, who asked not to be identified because the talks are private. KKR, the buyout firm run by Henry Kravis and George Roberts, and Goldman will likely sell a stake of less than 40 percent in order to remain the largest shareholders, although a final amount and timing has not been set, the people said.

The IPO plans follow a move by KKR and Goldman in August to sell 25 percent of Kion to Weichai Power Co. (2338), China’s biggest maker of heavy-duty trucks, helping to trim debt. Kion also sold 70 percent of its hydraulics unit to the Chinese firm. The moves brought Kion 738 million euros ($964 million) in investment from Weichai, which would keep its stake in Kion, or raise it to almost 30 percent in an IPO, the people said.

Officials at KKR, Goldman and Kion declined to comment on plans for an IPO.

Kion Chief Executive Officer Gordon Riske said on Aug. 31 that shareholders aim to do an IPO. Weichai Chairman Tan Xuguang said on Sept. 3 that an IPO was planned no later than 2014, as decreasing financing costs at Kion will be a “very good foundation´´ for an IPO.

Reducing Debt

Kion may also discuss with its lending banks what options it has to further reduce debt in conjunction with the IPO, in order to boost investor interest in the shares, one of the people said.

The investment in August secured new products and access to German engineering for Weichai as slowing growth in China saps demand for its trucks and engines. It also gave Kion better access to the world’s largest forklift market as the Wiesbaden, Germany-based company plans to overtake Toyota Industries Corp. (6201), an affiliate of Toyota Motor Corp. (7203), as the global leader in forklifts by 2015 or 2016, according to Riske.

Revenue Rises

Revenue at Kion rose 6.4 percent to 1.17 billion euros in the second quarter, with earnings before interest, taxes, depreciation and amortization gaining 6.6 percent to 190 million euros. The company had 22,250 employees as of June 30, with net financial debt at 2.74 billion euros.

On Oct. 2, German insurer Talanx AG (TLX) completed the largest IPO in Germany in five years, raising optimism for initial share sales in Europe’s largest economy.

Spain’s Telefonica SA (TEF) plans to sell almost a quarter of its German mobile business in an IPO this month, seeking to raise as much as 1.68 billion euros.

To contact the reporters on this story: Aaron Kirchfeld in London at akirchfeld@bloomberg.net; Richard Weiss in Frankfurt at rweiss5@bloomberg.net; Ruth David in London at rdavid9@bloomberg.net

To contact the editors responsible for this story: Jacqueline Simmons at jackiem@bloomberg.net; Benedikt Kammel at bkammel@bloomberg.net


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Companies Mentioned

  • KKR
    (KKR & Co LP)
    • $25.32 USD
    • 0.07
    • 0.28%
  • GS
    (Goldman Sachs Group Inc/The)
    • $176.82 USD
    • 1.80
    • 1.02%
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