After months of speculation and years of rumors, the Switzerland-based 3PL CEVA Logistics said today that it is scheduling an initial public offering (IPO) during the second quarter of 2018 and hopes to raise US$1.36 billion, part of which would be used to relieve some of the company’s massive debt loads.
In today’s statement, CEVA’s objective with the “all primary offering” on the SIX Swiss Exchange is to “to accelerate the execution of the company’s growth and margin expansion strategy by strengthening the balance sheet.”
Back in 2012, CEVA planned an IPO estimated at $400 million on the New York Stock Exchange, but pulled out due to market volatility at the time. Ever since, rumors have spread through the logistics business about another attempt by CEVA at toeing the public market waters.
After years of mediocre financial results and mounting debt, CEVA appeared to stabilize in 2017. Last year, CEVA’s revenues reached $7 billion, a rise of by 5.2 percent over 2016, while the adjusted earnings before interest, taxes, depreciations and amortization (EBITDA) increased by 10.2 percent, year-over-year, to $280 million.
Expected proceeds from the planned IPO, the company said, would be “used to repay debt, in order to deleverage the balance sheet to below 3x net debt/Adjusted EBITDA.” Should it go public, CEVA would be able to substantially reduce its interest expenses this year and reduce its reported losses.
“Our improving financial results and new business wins are confirmation of the successful execution of our strategy to establish CEVA as one of the global leaders in the asset-light logistics industry,” said CEVA CEO, Xavier Urbain. The IPO, he added, could give CEVA a higher equity valuation, making it a more serious player in the mergers-and-acquisitions market, and allowing it “to accelerate organic growth and participate in market consolidation.”
CEVA also said there will be a shakeup in its corporate governance, as “a new board of independent directors will be elected, chaired by Prof. Dr. Rolf Watter,” a partner with the Swiss law firm Bär & Karre.