Apax-Owned Baltic Classifieds Group to Raise €120m in July IPO

The online classifieds operator Baltic Classifieds Group has declared its intention to float on the London Stock Exchange in a move that could see the Apax owned company net €120m. BCG published an 'Announcement of Intention' document on its corporate website last Friday which, along with an accompanying registration document, lays out the company's plans.

Headquartered in Lithuania where its brands are particularly strong, BCG runs leading property verticals in Estonia (City24.ee and KV.ee) and Lithuania (Aruodas.lt) as well as #2 vertical City24.lv in Latvia along with several other car, generalist and job classifieds sites in the Baltics. Since 2019 the firm has been owned by Apax after it bought the shares from Media Group in a deal worth €300m.

Admission to the London Stock Exchange is expected to happen early next month with gross proceeds of the float expected to be around €120m. The shares to be sold will represent 25% of the BCG and come from Antler EquityCo, a company owned by funds advised by Apax Partners. BCG Directors currently own around 10% of the company's shares and are expected to remain significant shareholders after the IPO. Much like the IPO of leading Swedish property vertical company Hemnet in April, BCG's pitch will be a "targeted offering" to institutional investors from outside the US.

Speaking about the upcoming float, BCG Chair Trevor Mather (a former MD of Autotrader in the UK) said:

"It’s understood that online classifieds businesses, which have considerable network effects, are ones where number one market positions tend to be self-reinforcing. But I have not seen within one company a collection of classifieds businesses that consistently exhibit such strong market leadership positions. Baltic Classifieds Group has leading positions in the Automotive, Real Estate and Jobs and Services verticals which, together with our leadership in generalist marketplaces, have created a truly significant competitive moat."

"The business is in the Baltics, a high growth part of Europe which is becoming known as part of the ‘New Nordics’. It is led by a management team that has deep classifieds experience, that has created an environment of rapid decision making, of trust and of fun, and I believe this presents an opportunity for public market investors to become shareholders in a high quality business at an early stage of its monetisation journey.”

According to the Announcement of Intention document, the company is using the raise as a way to reduce debt, saying that its goal is "a net debt at IPO of approximately 2.75x FY21 Adjusted EBITDA". Raising the profile of the company and being able to incentivise management and employees as well as giving Apax an opportunity to realise part of their investment were also cited as reasons for the move.

The fact that Apax wishes to cash in on part of its investment in a European classifieds business may well not come as a huge surprise to many. The private equity company recently sold a majority stake in Southern European property vertical operator idealista for €1.3 billion after reportedly having grown frustrated at a lack of progress towards an IPO.

An earlier version of this article said that Apax had bought idealista, when in fact it was the selling party in that deal.