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Goldman Sachs preparing GBP 2bn flotation of iQ: Sky News
Posted on Monday, 09 September 2019 14:25
Private equity firm Goldman Sachs is considering taking iQ Student Accommodation public in a deal that could value the pupil housing provider at over GBP 3.50 billion, Sky News reported. According to city sources cited by the broadcaster, the buyout group and co-owner Wellcome Trust are close to hiring investment banks to prepare a stock market flotation in London. The group could raise GBP 2.00 billion in equity, according to an industry insider, who also cautioned it is hard to calculate a specific valuation for the business as it declines to comment on how much debt it is carrying. iQ has over ten years’ experience in the student accommodation sector, housing over 28,000 pupils across 66 sites in 27 cities around the UK. People with knowledge of the situation said that while banks are in the process of being hired, other options, including a private sale, are also likely to be considered. Goldman Sachs owns 70.0 per cent of iQ, while Wellcome Trust controls 28.0 per cent and Graystar holds a small stake. A flotation is likely to draw interest from investors that are attracted in the target’s real estate presence, Sky News observed, adding an initial public offering (IPO) would also bring scrutiny to the company’s board. iQ is chaired by Penny Hughes, a non-executive director that holds the same position at two other listed groups: Aston Martin and the Gym Group. As such, corporate governance guidelines say that an individual should hold no more than two chairmanships, meaning she would have to step down from one of the companies if the student accommodation firm ever goes public. iQ’s property valuation stood at GBP 3.50 billion at 30th September 2018. In the year to the same date, the group posted revenue of GBP 200.40 million, up 29.3 per cent from GBP 155.00 million in the previous 12 months. Earnings before interest, taxes, depreciation and amortisation for iQ totalled GBP 129.50 million in fiscal 2018, compared to GBP 95.50 million in FY 2017. © Zephus Ltd