Lego owners, Ontario teachers invest $614 million in ISS

Thu Aug 16, 2012 7:25pm EDT
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COPENHAGEN (Reuters) - Toymaker Lego's owners and a Canadian pension fund are to pay 3.72 billion Danish crowns ($614 million) for a 26 percent stake in Danish cleaning group ISS ISSHOI.UL, which will use the money to cut debt, relaunching its IPO plans.

ISS made a failed attempt at an initial public offering last year after which it agreed to a 130 Danish crowns per share cash and share offer from G4S Plc (GFS.L: Quote), a deal the British security services group later scrapped.

Thursday's deal was worth 105 crowns per share, said ISS, which has been focused on cutting debt and boosting growth.

"ISS is on track to significantly deleverage ahead of an IPO within a few years," chairman Ole Andersen said.

The Ontario Teachers' Pension Plan will invest about 2.605 billion crowns for its stake, while the Danish Kirk Kristiansen family's holding and investment company, Kirkbi A/S, which controls Lego, will pay 1.116 billion.

ISS's owners, private equity groups EQT Partners and Goldman Sachs Capital Partners (GS.N: Quote) are not selling any shares and remain majority owners, ISS said.

The proceeds will be used to repay 11 percent senior notes due 2014 after the December 2012 call date. The capital injection will lower ISS's leverage ratio to 5.15 times earnings before interest, tax, depreciation and amortization (EBITDA) from 5.86, ISS said.

Kirkbi, which owns 75 percent of the Lego Group, said it had been watching ISS for several years and considered it a well-run company, positioned for growth, particularly in emerging markets.

"We see excellent opportunities to continue growing revenues as ISS is well placed to capture new customers," said Jo Taylor, who heads Teachers' London office. 䐬   Continued...