Intertrust Plans EUR500m Amsterdam IPO, Eyes Consolidation

[Updates, rewrites throughout]

By Archie van Riemsdijk

Dutch-based financial services provider Intertrust aims to raise about half a billion euros ($564 million) by listing on the Amsterdam stock exchange, in order to repay debts and increase its financial flexibility in an upcoming consolidation in the global trust and corporate services sector, the company said Monday.

The IPO should be expected within a few months and "definitely before the end of the year", a person familiar with the situation told Dow Jones. The source estimates the expected market capitalization of Intertrust after the IPO at around EUR2 billion, considering the valuation of Capita Asset Services, which has comparable activities.

The company said in a press release it will use the proceeds of the IPO to repay some of its debts, but it also wants to use the flotation to drive industry consolidation globally, to further enhance growth.

"Access to the capital markets will give us added financial flexibility to take advantage of opportunities during an important period of consolidation in our sector", chief executive David de Buck stated.

"The landscape is very fragmented with a lot of small players and just a handful of large ones, including ourselves", spokeswoman Anne Louise Metz added.

The company creates trusts and other legal entities for multinationals and investment funds, implementing the advice given to clients by their law firms, accountants or tax advisors.

The company, carved out of nationalized Dutch bank Fortis in 2009, is one of the world's largest players in this field, with annual sales of nearly EUR300 million and leading market positions in the Netherlands, Luxembourg, the Cayman Islands and Guernsey. Of the world's 50 largest multinationals, 32 are doing business with Intertrust, the company website states.

International regulation for trust services--entities that manage holdings or other legal structures--is expected to increase in the coming years. "We welcome that", Metz said. "It improves the quality of the industry."

That industry has been under scrutiny of late, due to increasing reports that large multinationals manage to pay far less in tax than smaller companies or citizens, using an array of legal entities and "shopping" around globally for tax treaties.

In June, European regulators opened formal investigations into the tax practices used by Apple Inc., StarbucksCorp. and Fiat SpA, in a move that tax experts said could deter major corporations from using certain tax structures to shrink their tax bills.

However Intertrust operates well within the lines and uses standards that are often more strict than regulatory standards, the spokeswoman said. "Aggressive tax structures are not our business."

Apart from the new shares, the IPO will probably also include existing shares, the company said. Clients of private equity firm Blackstone Group LP, which own 74% of the shares, may use the opportunity to cash in a "limited part" of their investment. The 165 managers and employees that own the remaining part of the company may also sell part of their shares.

Deutsche Bank AG (DB) and UBS Group AG (UBS) are acting as joint global coordinators and joint bookrunners for the offering, Intertrust said. Lazard is acting as financial adviser to the company and shareholders.

Write to Archie van Riemsdijk at [e-mail]

(MORE TO FOLLOW) Dow Jones Newswires

September 21, 2015 11:51 ET (15:51 GMT)

Copyright (c) 2015 Dow Jones & Company, Inc.