Bilfinger Berger to IPO Aussie unit in July

The German group will list its Australian construction unit – now known as Valemus – in July in a bid to raise up to A$1.4bn.

Bilfinger Berger, the German multiservice group, has signed off on the public listing of its Australian construction business in what is expected to be Australia’s second-biggest initial public offer (IPO) of 2010 to date.

The offer will see the company sell its entire shareholding in its Australian construction business – recently renamed Valemus – in a listing due to start on July 9. Bilfinger Berger plans to issue up to 555 million shares at between A$2.20 (€1.51; $1.79) and A$2.50 per security, which could raise proceeds from the sale of between A$1.22 billion and A$1.39 billion. It said in a statement it expected a minimum net cash inflow from the IPO of A$780 million.

The share offering represents a price of between 10.5 to 12 times Valemus’ forecasted 2010 earnings before interest and tax, which are expected to rise by close to 10 percent this year to A$178 million, Bilfinger Berger said.

Valemus is Australia’s second-largest construction company behind market leader Leighton, majority-owned by competing German infrastructure group Hochtief. It includes Abigroup, Baulderstone and Conneq, which specialise in engineering, construction, asset management and maintenance operations. Valemus’ forward order book amounts to close to A$6 billion.

The IPO was first announced in January as part of the group’s strategy to reduce the output volume of its construction business from the €6 billion recorded in 2008 to around €2 billion in the medium term, the company said in a statement. But stock market volatility has affected the timing of the share offer by a couple of weeks, with Valemus chairman Nick Greiner saying that:

“I would be kidding you to say none of us had any nervous moments [regarding the float timing]”, adding that he would have preferred stock markets “where they were three months ago”.