Almost on the verge of the final stretch of 2024, the IPO calendar in Spain is reactivated again. The market now expects During the month of November the Cox bell rings. Based on the multiples of the company’s comparables, Its stock market valuation could exceed 1.1 billion euros. From this value, the discount for going public should be subtracted, between 10-15%.
At the beginning of October, the company (formerly Coxabengoa) made public its intentions to carry out a Public Sale Offer (IPO) with which to begin trading on the Spanish stock market. With it, this would be the second company to jump to the Continuous Market so far this year, after the debut of Puig (the largest IPO in the world in 2024, with a market value of 13.9 billion euros) last May . Taking into account that December is a complex month to go public, The only window of opportunity to jump onto the Spanish floor opens this month of November.
Cox plans to raise around 300 million through this operation that, initially, will be aimed at the growth of the company itself, with the aim of taking advantage of the opportunities that arise in its sector.
The business of this company essentially resides in two segments: on the one hand, water and energy concessions (from where they obtain the bulk of their profits, 80% specifically) and, on the other, the engineering, operation and maintenance of its plants (they are not immersed in the construction process). It would be the water business where one of the company’s greatest growth potentials would lie and, therefore, also the energy business, since both are linked, since power plants are needed to supply this electricity to the water plants.
Thus, the increase in the water business can range between 25% (lower part of the range) and 35% (10% of this growth would come from the desalination part and 10-15% from water treatment). The increase in the company’s profits will depend on success in taking advantage of growth opportunities, although it would always be double digits. In this sense, sources close to the operation point out that Cox’s gross operating profit (ebitda) this year would be 175 million euros (EBITDA in the first half of the year was 23 million).
Given its business, the main comparables with which Cox would begin to compete on the stock market would be Veolia and the Spanish Acciona. These three companies are leaders in their sector and, furthermore, the only ones (along with another Egyptian company, although of a much smaller size) that have water certifications.
In this sense, the consensus of experts collected by FactSet expects ebitda of 6,725 and 2,058 million euros for Veolia and Acciona respectively. The debt of the French company reaches 18,471 million euros which, with a capitalization of 21,600 million euros, leaves the company trading at an ev/ebitda multiplier of 6 times. For its part, Acciona (which would close 2024 with a debt of just over 7,730 million euros according to estimates) presents a multiple of 7 times. Thus, taking the average of both multipliers (since it is assumed that Cox will grow more than both firms, that is why the average multiple is taken for the calculation) and the projected ebitda for Cox this 2024, The Spanish company could make its jump onto the stock market with a valuation of 1,130 million euros. At this price no debt would have to be subtracted since Cox is clean.
To those possible 1,130 million euros that the company may be worth on the stock market, the discount required by institutional investors should be applied when they go to the primary market in an IPO and which is usually between 10% and 15%, depending on each case. . Applying it, Cox’s valuation could be between 1,017 and 960 million euros.
In your case, furthermore, the growth of its profits would become higher than what the experts themselves expect for these competitors. By 2025, analysts project an increase in Veolia’s ebitda of 6% and for the Ibex 35 company of 15%.
For the moment, Cox’s comparables live one of lime and the other of sand in bag. While the behavior of Veolia on the stock market registers a slight revaluation of 2%, Acciona shares lose more than 10% in the year (during the year, losses have increased by more than 20%) and it is established among one of the most bearish firms on the Ibex 35. Furthermore, it is worth noting that the performance of Spanish renewables in the national market is being uneven. Within the Ibex 35, Acciona’s green subsidiary, Acciona Energía, suffers even greater falls in 2024 than its parent company, of 32%, and Solaria’s price sinks up to 46%, making it the most bearish company in the index this year. In the Continuous Market, however, Audax Renovables, Grenergy and Ecoener register annual increases of 38%, 265 and 2% respectively. Mired in a crisis, Soltec’s trading has been suspended since the end of September, but the company lost more than 50% of its value for the year.
More information about the operation
The firm founded by Enrique Riquelme will not carry out a capital increase, the operation It will simply be carried out through the IPO with which the positions of the main shareholders will be diluted. The executive president of Cox, through Inversiones Riquelme Vives, is the largest shareholder with 78%. Alberto Zardoya, with 17.5%, and the National Brotherhood of Architects (HNA), with 4.5%, complete the capital. With an OPS of 30% – the legal minimum is 25% – Riquelme would retain the majority of the shareholding. The offering will be made to qualified investors and will include a placement in the US aimed at qualified institutional investors.
The operation is not yet insured by any investment bank. And, once it went public, the company would decide whether Cox continues to be listed in the Mexican market.
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