Security firm Verisure Plc announced its plan to raise about €3.1 billion ($3.7 billion) via an initial public offering (IPO) in Stockholm.
The highly anticipated listing could become Europe’s largest such deal since Porche AG’s blockbuster listing in 2022 which raised more than €9 billion ($10.7 billion), according to Bloomberg data.
The Swiss company specialises in providing professionally monitored smart alarm systems for houses and businesses, said the company website.
Details about IPO
The company aims to use the proceeds from the IPO to strengthen its balance sheet and reduce net leverage, according to a statement on Wednesday.
The offering will consist of new shares, with two existing investors, Alba Investments Sarl and Securholds Spain SL, contributing €235 million ($279 million).
DNB Carnegie Investment Bank AB, Goldman Sachs International and Morgan Stanley & Co. will be leading the offering, the report said.
The funds raised from the planned IPO will be particularly used to refinance certain outstanding debt and to fund the acquisition of ADT Mexico. The new money is also expected to reduce Verisure’s net leverage — a measure that captures the ratio of earnings to debt — to approximately 3 times at the time of the listing.
As Bloomberg senior credit analyst Stephane Kovatchev noted, the planned debt reduction “could underpin its bond spreads in the coming quarters”, and suggested that the recently issued 2030 note could tighten the most if the proceeds from the IPO are used to retire nearer-term maturities.
Return to home market
Founded in 1988 in Sweden, Verisure will mark a return to its home market with the planned Stockholm IPO. The company provides monitored security systems for households and small businesses in Europe and Latin America, with products ranging from video detectors and cameras to smoke barriers, shock sensors and smart locks.
The company reported an annualized recurring revenues of about €3.1 billion last year and adjusted earnings before interest and taxation of €819 million in 2024, according to its annual report.
Analyst insights and market outlook
According to Kovatchev, “Verisure could prove to be a strong IPO candidate given its resilient subscription-based model, high recurring revenue visibility and defensive industry exposure.”
He also added that the firm generates predictable cash flows from its more than 5 million customers, which in turn supports margins above 40% at the Ebitda level.
The success of Verisure’s IPO could encourage other large companies to consider a listing in Europe’s equity markets, Bloomberg report said.
Verisure is currently rated four steps into junk territory but both Moody’s Investors Service and Standard & Poor’s have assigned the ratings a positive outlook, suggesting the possibility of an upgrade.
