Rexel Prepares For Initial Public Offering

Rexel SA, Paris, the world’s largest distributor of electrical equipment, filed documents this week with Autorite des Marches Financiers (AMF), France’s securities regulators, that will prepare the company to proceed with an initial public stock offering, possibly in March or April, depending on market conditions.

The AMF filing is essentially a declaration of intent to launch an IPO, the first step in the process of taking the company public. If it proceeds, the offering will return Rexel to the Paris exchanges just two years after being acquired from Pinault-Printemps-Redoute and taken private in a $4.9 billion leveraged buyout. At an expected value between $1.3 billion and $2 billion, Rexel’s offering would also be the largest IPO France has seen since 2005.

Since the company went private, its owners — led by an investor group including Clayton, Dubilier & Rice; Eurazeo; and Merrill Lynch Global Private Equity — have pursued an aggressive growth-by-acquisition campaign that culminated in Rexel’s purchase last year of General Electric’s GE Supply for $725 million. The move placed Rexel among the largest electrical distributors in the North American market during a time of intense consolidation and strong growth in Rexel’s core construction markets.

GE Supply was only the largest win in a busy global acquisition phase for Rexel. The company also bought Electro-Material in Switzerland; ElettroBergamo in Italy; and Capitol Light and Supply, Hartford, Conn., one of the largest independent electrical distributors in New England.

The acquisition binge was financed through debt, which now stands just over $5.1 billion, up from $4.2 billion in 2005. At the same time, the company’s net income has doubled to more than $351 million on revenues of $12.2 billion.

The value of the stock offering is estimated between $1.3 billion and $2 billion, though a final number has yet to be decided. Rexel’s market value is estimated at $3.9 billion.