Triton Partners sets strong marker for 2024 IPOs with Renk share sale

Renk’s share price has shot up more than 30 percent on its first day of trading, while Triton retains overall control of the drive product manufacturer.

Triton Partners’ freshly listed portfolio company Renk Group has buoyed private equity firms’ hopes that the IPO market is reopening, after its share price closed at €19.65 on its first day of trading on Wednesday – up 31 percent from its listing price of €15.

Renk, a manufacturer of drive products for military and civil customers, had already upped its placement on the Frankfurt Stock Exchange to 33 million shares from an original target of 30 million. The sale raised around €500 million and had a free float of 27 percent.

That all suggested market conditions have moved on from October when Renk postponed its IPO, blaming a market environment that had “clouded noticeably”. At that point, public markets struggled as economic data pointed to interest rates being higher for longer. But now, markets are pricing in rate cuts for 2024.

Triton still holds a majority position in Renk, which includes gear units and suspension systems in its product set and was founded over 150 years ago in Augsburg, Germany, where it still calls home.

The private equity firm will have banked a nice profit on the sale. Triton paid around €700 million when it acquired the business from automotive giant Volkswagen and minority shareholders in October 2020, PE Hub Europe understands. But the listing price of €15 gave it a market cap of €1.5 billion – a volume now closer to €2 billion thanks to the opening day’s strong trading.

Investors in the sale included KNDS Group, a European defence industry company, which subscribed for €100 million of shares, and Wellington Management Company, a private investment firm, which took €50 million.

Renk was in many ways a typical deal for Triton. Forty percent of its deals have been carve-outs of corporate orphans. The London-based private equity firm has made about 20 appointments to top positions at Renk, including a new CEO and CFO, introduced a new organisation structure and invested more than €500 million in capex, R&D and M&A. Under Triton’s ownership, Renk also launched a digital customer portal and condition monitoring technology.

All of that helped Renk grow more than 24 percent annually since 2020, with its employee base jumping by around 1,000 people to around 3,500. Its revenue grew from €550 million in 2020 to €849 million in 2022, while its adjusted EBIT margin rose from 11 percent in 2020 to 17 percent in 2022.