Frankfurt The building materials group Xella, known for its Ytong aerated concrete, has started preparations for an IPO. The Duisburg-based company’s owner, private equity firm Lone Star, has hired investment banks Goldman Sachs and JP Morgan to organize the planned new issue, according to several people familiar with the transaction.
With the deal, which is targeted for September, Xella could be valued at more than 2.5 billion euros. However, the prerequisite is that the capital market environment is right. The high price fluctuations are currently making IPOs impossible. Lone Star, Xella and the banks did not want to comment on the stock exchange plans.
With 7,100 employees, Xella manufactures building materials such as aerated concrete from the Ytong and Hebe brands, as well as Silka sand-lime brick and Multipor insulating panels. The company generated sales of around 1.6 billion euros a year in 2020, and operating profit (Ebitda) amounted to 323 million euros. Xella intends to publish figures for the past year in April.
Competitors such as the Austrian Wienerberger or the French Imerys are currently trading on the stock exchange at almost six times their expected operating profit for 2022. Other listed rivals are the Belgian Etex or the British Marshalls. Valuations have recently come under pressure given the correction in stock markets. According to insiders, Lone Star wants to wait for a recovery before Xella is taken public.
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A valuation of 2.5 to 3 billion euros had already been targeted for earlier plans to take Xella public. In 2015, however, the then owners PAI and Goldman Sachs decided against an IPO and instead sold the company to the US financial investor Lone Star. In turn, Lone Star had considered listing Xella in Frankfurt in 2019, but did not pursue the plans at the time.
Xella benefits from the construction boom
Xella originally belonged to the Haniel Group. The origins of the company go back to the 1940s. From 1948 Haniel Bau-Industrie produced sand-lime bricks. After the turn of the millennium, the company bought up the Ytong and Hebe brands. The insulation company Ursa was added in 2017, but was sold again in January 2022.
Xella is currently benefiting from the unabated construction boom in Germany. According to estimates by the Central Association of the German Construction Industry, sales in the sector will increase by 5.5 percent to 151 billion euros this year. Manufacturers of building materials are succeeding in pushing through rising prices. In the case of insulating materials, for example, they are 30 percent above the previous year, according to the association.
Lone Star is an experienced investor in the sector. Among other things, the company bought BASF’s construction chemicals division in 2020 and passed it on to the Swiss company Sika 14 months later. When it was sold, Lone Star achieved a valuation that was two billion euros higher.
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