Cobham suitor Advent puzzles over £2.5bn Rubix float

13 November 2019, 14:08 | Updated: 13 November 2019, 16:58

The buyout firm which is in the process of sealing a £4bn takeover of the British defence and aerospace group Cobham is drawing up plans to float another of its UK-headquartered assets.

Sky News has learnt that Advent International has hired advisers to prepare an initial public offering (IPO) of Rubix Group Holdings, a Cheshire-based distributor of industrial repair kits, that could value it at well over £2.5bn.

Goldman Sachs and Morgan Stanley, the Wall Street banks, have been appointed to lead the flotation, City sources said on Wednesday.

A listing is expected to take place next year, although the disclosure that Advent is examining an exit from Rubix could also flush out approaches from potential buyers.

Advent acquired Brammer, a long-standing name in British industry, in late 2016, before merging it the following year with IPH, a French-based peer.

The combined business, which was renamed Rubix in 2018, is forecast to record earnings before interest, tax, depreciation and amortisation (EBITDA) next year of around Euros300m.

That could see it valued in a public listing at more than £2.5bn, according to analysts.

Rubix employs about 8000 people, and provides critical services to large industrial customers in sectors including automotive, cement and utilities.

Goldman and Morgan Stanley are both existing lenders to Rubix, according to the company.

Other investment banks are expected to be appointed to work alongside them on the IPO.

The initial preparations for a listing come as Advent awaits a determination by the government on the fate of its swoop on Cobham, which has ignited an unexpectedly vigorous political debate.

Advent, which is based in the US but describes itself as a global investor, agreed a takeover with the company's board in July which immediately provoked criticism from its founder's family.

Last month, Andrea Leadsom, the business secretary, received a report from competition watchdogs about the proposed deal, with the contents of it unlikely to be disclosed until after the general election.

In line with commitments extracted from Melrose Industries when it acquired the British engineering group GKN last year, the new government could demand binding undertakings from Advent about the future of Cobham's British workforce and research and development budget.

A spokesman for Advent declined to comment on its plans for Rubix.