Battery maker Varta jumps on Frankfurt stock market debut
FRANKFURT – German battery maker Varta shares jumped in their stock market debut in Frankfurt, as investors hope to benefit from an expected surge in demand for the company’s products including home energy storage systems.
The shares started trading at 24.25 euros, 39 percent above the issue price of 17.50 euros. By 0800 GMT they had pared gains to trade up 10 percent.
Varta specialises in small batteries for headphones and wearable consumer electronics, as well as large energy storage systems for power generated by solar panels on homes and commercial buildings.
Varta expects rapid growth in the coming years, as demand for hearing aids increases in an aging population. In energy storage it sees demand for large batteries increasing as German subsidies on for the sale of renewable energy are phased out.
The company is planning to use the bulk of the 150 million euros in proceeds from the initial public offering to fund an expansion in production capacity, mainly in Germany.
The IPO values the company, which remains majority owned by Austrian investor Montana Tech Components, at 669 million euros. If the overallotment option is fully exercised, 35 percent of the shares will be in free float.
Varta, cancelled previous IPO plans last November, citing an unfavourable market environment.
Varta formerly belonged to historic German industrial group Varta, which was broken up into three smaller units at the beginning of the century.
In 2002, the car battery business was taken over by Johnson Controls and the household batteries unit was merged with U.S. firm Rayovac, now called Spectrum Brands. The microbattery business was bought by Montana Tech in 2007.
Berenberg advised on the IPO, along with Unicredit.
Source: Reuters
