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Hess cuts IPO price range

17 October 2012 12.00 BST

(Germany) - German lighting manufacturer Hess has cut the price range for its planned flotation and extended the subscription period.

Hess AG, the German manufacturer of external and architectural lighting, has reduced the price range for its offered shares to between €15.50 and €18.50 (a reduction from € 20.00 and € 23.00) on the Frankfurt Stock Exchange. Under difficult market conditions, the offering period during which interested investors can subscribe for shares has also been extended to October 23 from the original date of October 17th.

Hess, which generated €68.1m revenue in the 2011 financial year, grew further in the first half of 2012, achieving approximately 39 per cent revenue growth. It now plans to offer up to 2.3 million shares plus a 345,000 share over-allotment from the holdings of Hess Grundstuecksverwaltungs GmbH & Co KG which will see gross proceeds between 35.7 million and 42.6 million euros. The original targeted issue volume was between € 46 million to € 53 million excluding the over-allotment option. The targeted free float will be around 50.7% after the IPO if the offered shares are fully placed.

The company primarily aims to finance its continued growth with the proceeds from the transaction. The strategic focus is the high-growth global LED market in the general lighting area, for which an average annual growth rate of 31.1 % is forecast between 2011 and 2020. Hess aims to utilise its positioning on this market, mainly through expanding its international sales operations, and the opportunistic acquisition of interests in companies or entire companies – preferably in, or with good access to, the growth regions of the Middle East, North America and Asia. Hess also plans to develop further technologies in the LED and OLED (organic LED) area, and to establish a new “Residential Lighting” division. The existing “Avangardo Line” product line, in which Hess offers lighting for building-related use, is then to be converted fully to LED technology.

Christoph Hess, CEO of Hess AG, explains the motives for the IPO: “As an LED pioneer, we have a strong international sales network with established brands. We have grown our revenues by an average of 14 % per year between 2009 and 2011, and we have grown ever more profitable over the same period. At the same time, we identify considerable growth potential in our core markets of Europe, Asia, the Middle East and North America. Demand for energy-efficient lighting is becoming increasingly stronger on all of these markets. The planned IPO plays a decisive role in helping us to participate in this LED revolution.”


Christoph Hess, CEO of Hess AG: “IPO plays a decisive role in helping us to participate in LED revolution.”

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