Successful start for Stock Spirits

Stock Spirits, the Buckinghamshire-based company which is the largest producer of vodka in Poland and the Czech Republic, made a successful debut on the London stock market earlier this week.

Some 55% of the shares were placed with institutions at 235p, the middle point of the guide range, raising £206.5m and valuing the total company at £470m. That is below the price sought a year or so ago when US private equity house Oaktree sought to sell Stock to Diageo, a deal that the worlds largest premium drinks company walked away from.

In all there were four times as many applications for shares as were offered, but it looks as though Stock got its pricing correct as the price fell by 4% on the opening day to 226p after opening marginally up on the offer price at 240p.

Stock is using the proceeds of the flotation to reduce debt and to boost its balance sheet in preparation for potential takeovers of companies in Eastern and Central Europe that will provide it with routes to those markets.

On its present pricing, Stock is trading at about 8.4 times its earnings before interest, taxation, depreciation and amortisation. That compares with multiples of 13.9 and 12.6 for Diageo and Pernod Ricard.

Stock’s chief executive, Christopher Heath, realised nearly £2m in the share placing through the sale of a 2.8% stake in the company. Oaktree remains the largest shareholder with a 38.3% stake in Stock.