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I-care mandates JP Morgan for 2023 IPO; in conversations with cornerstones – CEO

Belgium-based manufacturer I-care is preparing for an IPO next year and has appointed a bank to steer the process, CEO Fabrice Brion told this news service, as it anticipates a sustained streak of acquisitions.

The company is eyeing a listing in 3Q23, if market conditions allow, he said. He is looking at a primary quotation in Belgium’s Euronext segment with potential primary shares also in Amsterdam or Paris, he added.

The company has mandated JP Morgan as global coordinator and Allen & Overy as legal advisers, and discussions are underway with joint bookrunners and financial advisors, he said.

The company is looking to raise EUR 50m, which will allow to close the unicorn valuation gap and eventually go beyond EUR 1bn, he said. Conversations are happening with cornerstones that are looking to participate in the public round, with at least three already committed, he said. No dual track process is envisioned, with the IPO being the only option on the table, he said.

The company recently attracted a fresh capital injection of EUR 40m, according to reports; the capital was raised with existing and new shareholders and investors include Walloon bank CPH, IMBC, and SRIW.

No other funding rounds are planned ahead of the IPO, Brion said, adding that the current EUR 40m round is still under closing with two more investors that will add themselves to current line-up before the end of 2022. After that, the total funding will reach 50m EUR; one stemming from 10m EUR raised from employees in December 2021 that had an initial target of just EUR 2m; and then 40m EUR raised from investors, he said. The ownership structure sees 75 per cent owned by founders, management and employees and then the rest by investors, he said.

With the IPO, global funding will reach EUR 100m, he said. Of this, 35m EUR is allocated for M&A. On the debt side, the company has a potential line with Belgian banks such as Belfius and ING that is roughly equivalent to its equity amount, he said.

The company plans to multiply turnover by 5 in the next 5 years – with its order book already full for 2023, he said. The growth for the next 2 years is secured organically but the company is always looking at M&A opportunities to complement it, he said.

I-care pursues three types of M&A; technology acquisitions focused on AI that target a lot of startups finding the current timing difficult to raise funds and also opportunities to integrate technology and improve it; as well as companies that might not have invested in digital transition but will allow to boost industrial distribution network and to extend business reach in new countries and regions; and finally those that allow to increase of market share in general.

The desired size could go up to the same revenue growth projected for I-care next year (estimated at EUR 75m), starting from a minimum EUR 5m for the two latter types of M&A, while it remains flexible and open to those under EUR 1m for technology companies, he said. The geographic focus comprises mostly EU, US, Canada; the company is looking to penetrate more industries such as manufacturing, logistics and infrastructure, he said.

Discussions are ongoing with potential targets, including talks with one AI business, and then other companies for each of the three types of acquisitions that are likely to be completed in 1Q23. The M&A strategy will be opportunistic for the next 2 years as turnover growth is secured, and then strategic for the three years afterwards. The company is using advisers such as JP Morgan, personal contacts and an internal M&A team for acquisitions search, due diligence and integration, but many companies reach out directly, he said.

The company has an organic growth plan for 2023 to open 12 new offices globally.

JP Morgan declined to comment. Allen & Overy did not respond to a request for comment.