Knorr-Bremse appoints banks for 2018 stock market listing

German brake systems maker Knorr-Bremse has hired banks to help prepare for a potential stock market listing next year, people close to the matter said. The company has mandated Deutsche Bank, J.P Morgan and Morgan Stanley as "global coordinators" to help organise an initial public offering (IPO) that could value it at 13-15 billion euros ($15-$18 billion), the people added.
Knorr-Bremse is also poised to pick bookrunners for the offering, with BNP Paribas, HSBC and Berenberg seen among the front-runners, they added. Knorr-Bremse and the banks declined to comment. Company owner Heinz Hermann Thiele said in September the maker of braking systems for rail and commercial vehicles was weighing various options, including an IPO.
Knorr-Bremse, which employs 25,000 people, scrapped in September a long-running attempt to buy smaller Swedish rival Haldex. Last year, Knorr-Bremse posted earnings before interest, tax, depreciation and amortisation of roughly 1 billion euros on sales of 5.5 billion euros.
Peers such as Wabco and Westinghouse Air Brake Technologies trade at roughly 15 times their expected core earnings. According to the people familiar with the matter, Thiele is considering floating a stake of 20-40 percent in Knorr-Bremse, potentially in summer or autumn 2018. He told the Handelsblatt daily in September that the family would keep a majority stake.
Knorr-Bremse would be vying for the attention of investors, as several other German companies are looking at IPOs. Siemens, for example, is planning to float its 40-billion-euro Healthineers medical equipment business on the Frankfurt stock exchange in the first half of 2018.
And Deutsche Bank is preparing its asset management arm for a listing that may value the unit at 8 billion euros. SpringerNature, the publisher of science magazines Nature and Scientific American and estimated to be worth 4-5 billion euros, is working on a stock market listing too, while German home shopping TV network HSE24 is targeting an IPO that could value it at 1.5 billion euros.
Smaller IPOs such as those of machine tool maker United Grinding Group, residential property developer Instone and caravan maker Knaus Tabbert are also in the works. Despite record stock market valuations, only a few companies listed in Frankfurt this year.