Scout24's IPO gets off to hesitant start

Germany's Scout24 Group, which includes ImmobilienScout24, the largest property website in Germany, debuted on the Frankfurt Stock Exchange this week. The company placed 38.64m shares, including 7.6m new shares in the form of new capital raising, which should raise about €1.16m in gross proceeds for the company, including a greenshoe option.

The issue price was €30.00 per share, just below the mid-price of its pre-IPO spectrum of €29.50 to €31.00. A slightly higher top price of €33.00 had been pitched, but the range was narrowed down just prior to the IPO, given the somewhat cloudy environment on global markets. Credit Suisse and Goldman Sachs International acted as joint global coordinators and joint bookrunners, while Barclays, Jefferies and Morgan Stanley acted as joint bookrunners.

This was the Berlin-based Scout24's second attempt to list itself as a public company, after it withdrew its proposed launch in autumn 2014 due to excessive volatility on the stock markets. At the time it was also thought that the new owners had not fully bedded down and the move was premature.

The new owners, private equity groups Hellman & Friedman and Blackstone, had paid €1.5bn to Deutsche Telekom for a 70% stake in the Scout24 business, with the German telecoms group retaining 30%.

“Together with our shareholders, we have worked hard to position Scout24 in all regards for a successful future,” said CEO Gregory Ellis, an American brought in by H&F to ready the firm for flotation. “The planned IPO is the logical next step in the company’s development path, and now is the right time to take it.”

Scout24's turnover in 2014 was €342m, up 11% on the previous year, with EBITDA of €149m a gross profit of 44%. The group has nearly 1,100 staff.

What was proposed then was to float 25% of the company for about €800m, before market uncertainty led to the IPO plans being shelved. Since then a trade sale had also been mooted, with suitors such as Axel Springer Verlag and ProSieben having shown interest this summer, before walking away.

Scout24 is the leading digital classifieds group in Germany, with portals such as AutoScout24, dating website FriendScout24, and FinanceScout24, in addition to its flagship property website ImmobilienScout24, which attracts more than 12m unique monthly visitors.

Since selling its stake to the new owners last year, Scout24 has undergone a major cost-cutting regime, selling off smaller assets and refinancing its debt on more favourable terms while paying a dividend to its owners. The group expects to post earnings before interest, taxes, depreciation and amortisation (EBITDA) of more than €200 million in 2016.