Dutch construction group VolkerWessels is set to float in Amsterdam, triggering a payday of up to €800m for one of the Netherlands’ richest families.
The construction group, which is 100 per cent owned by the billionaire Wessels family, is expected to attract a market capitalisation of about €2bn, according to people close to the company.
While a final decision has not been made on the size of the stake, the company is expected to try to float between 30 and 40 per cent of its shares.
The Wessels family will remain the majority shareholders of the business in the short term, according to Jan de Ruiter, chief executive of VolkerWessels. “The family is diversifying its assets,” he said.
Although the family “will remain a long-term shareholder”, they will reduce their stake to a minority in the future. No new shares will be sold during the IPO, but Mr de Ruiter stressed: “We understand the need for liquidity in the market.”
A float would cap off a tumultuous decade for the group, which makes everything from light-rail systems to football stadiums. In the summer of 2007, private equity group CVC bought a 42.5 per cent stake in the group just before the financial crisis. But by 2013, CVC had reversed course and sold its stake back to the founding Wessels family.
The move would make VolkerWessels public again, less than two decades after it was taken private by the Wessels family in 2003. VolkerWessels posted annual earnings before interest, tax, depreciation and amortisation of €254m in 2016, up 9 per cent on the year before. Revenues were €5.5bn.
As a public company, VolkerWessels will aim to pay out between 50 and 70 per cent of its net income as a dividend. Management estimates the group will achieve an operating margin of between 4.5 and 5.5 per cent over the medium term, with sales growth of between 3 and 4 per cent per year.
About 70 per cent of VolkerWessels sales come from the Netherlands, with the remainder coming from the UK, Germany and North America.
While the Netherlands has been stable, the collapse in sterling following the Brexit vote hit the group. The longer-term effects of Brexit on the group’s British operations are still unclear. “It is too soon to tell,” said Mr de Ruiter.
VolkerWessels was formed in 1997, after a merger between Kondor Wessels and Volker Stevin, which started life in 1854. This merger was overseen by Dik Wessels, who turned the small eponymous Dutch construction firm he inherited from his father into the country’s second largest — becoming one of the richest men in the Netherlands in the process, with an estimated fortune of €3.3bn, according to Quote, a Dutch magazine.