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Suse IPO expected to price IPO towards lower end of range - bookrunner

By Reuters

FRANKFURT (Reuters) – Enterprise software company SUSE is guiding investors to expect its Frankfurt initial public offering to price at 30 euros ($36.49) a share, towards the lower end of its 29 to 34 euros per share marketing range, a bookrunner on the deal said.

SUSE, whose open-source software helps run applications on cloud servers, mainframe computers and devices at the edges of networks, is slated to see its shares debut on the Frankfurt stock exchange on Wednesday.

SUSE’s owner EQT is offering 14.2 million shares, waiving an upsize option. Including new shares, 37.8 million shares for 1.1 billion euros are being sold. The deal gives the company a valuation of 5.1 billion euros.

While the deal was oversubscribed throughout the range on full deal size including the upsize option, EQT opted for a lower pricing to secure a solid aftermarket performance, people familiar with the transaction said.

EQT will remain the company’s largest shareholder with a stake of 77.6%. It acquired SUSE in 2018 for $2.5 billion and stands to double its money.

Roughly half of proceeds accrue to SUSE through the issue of new shares, enabling it to reduce its debts as a multiple of core earnings to 3.25 times.

The IPO adds to a busy season in Frankfurt, following the $10 billion listing by German used-car trading platform AUTO1 a $14 billion debut by Vodafone’s infrastructure unit Vantage Towers and the $5 billion IPO of labs group Synlab.

While investors have so far made money on these and other deals, not all IPO-hopefuls have succeeded as investors have gotten more selective about where to put their money.

Last week, online car trader Meinauto cancelled its stock market listing on the last day of bookbuilding on weak demand.

BofA Securities and Morgan Stanley are acting as Joint Global Coordinators and Joint Bookrunners, with Deutsche Bank, Goldman Sachs, Jefferies and J.P. Morgan supporting the Suse IPO as joint bookrunners. (This story corrects to clarify in third para that existing and new shares are on offer)

($1 = 0.8221 euros)

(Reporting by Arno Schuetze; Editing by Riham Alkousaa and Louise Heavens)