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Stirling seeks private capital for Ipsen acquisition
Posted on Thursday, 17 October 2019 11:17
Stirling Industries is exploring a variety of options to fund the proposed acquisition of Ipsen International in what would be the special purpose acquisition company’s (SPAC’s) initial business combination.
In a statement released today, the cash shell said deteriorating market conditions are weighing on investor sentiment and are “leading many institutional investors to adopt a cautious stance”.
Due to the impact of global trade and geopolitical tensions, Stirling is unlikely to publicly raise money and instead is in discussions with “providers of equity and private capital”.
While considering alternative funding sources, the SPAC is also reducing its cost base, as it does not have the resources to pursue further opportunities.
Stirling noted it is preparing to wind-up and return net proceeds of its initial public offering in March 2018 to shareholders, just in case it does not receive private equity support for its proposed acquisition.
The blank check company was formed to buy businesses with strong fundamentals and enterprise values between GBP 100.00 million and GBP 750.00 million.
It intended to finance transactions through a combination of new equity and leverage, with the target debt to be no more than 2.5x earnings before interest, tax, depreciation and amortisation.
Following rumours and speculation, Stirling announced at the beginning of the month it wants to acquire Ipsen, a German industrial furnaces developer and manufacturer.
The European target is billed as a market-leading global provider of heat treatment equipment and associated aftermarket services.
It sells into a range of sectors with attractive market fundamentals – Ipsen supplies blue-chip global original equipment manufacturers across the aerospace, manufacturing and automotive industries, among others.
According to its website, the company has production locations in the US, its home city of Kleve and in Asia, specifically, Japan, China and India.
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