Ireland's Kingspan plans Amsterdam IPO for data-centre focused unit

DUBLIN (Reuters) -Kingspan has begun working on an initial public offering of 25% of its data-centre focused ADVNSYS business in a deal tapping into booming demand for data storage that could leave the Irish building materials manufacturer debt-free.

The initial public offering of ADVNSYS, which produces bespoke critical infrastructure such as ventilation and daylighting, would take place in Amsterdam, likely in the first quarter of next year, CEO Gene Murtagh told analysts on a conference call.

ADVNSYS' core profit has more than doubled over the last five years to 197 million euro ($230 million), thanks to a rapid AI-fuelled expansion in data centre infrastructure, and could hit around 300 million euros next year, Murtagh said.

Kingspan shares were up 11.5% at 1110 GMT.

Kingspan would control 75% of ADVNSYS after the flotation and would continue to consolidate its revenues and earnings, Murtagh said. Two global investment banks have already been appointed to jointly lead the process, he added. 

"If that was successful, both Kingspan as the parent and ADVNSYS would end up essentially with zero debt, and obviously huge runway for both the businesses to take it from there," Murtagh said. 

Kingspan had a net debt of 1.9 billion euros at the end of June, 1.74 times its earnings before interest, taxes, depreciation and amortization (EBITDA).

With rivals servicing the data centre industry trading at 20 times earnings, that could imply a valuation of over 6 billion euros, CITI analysts said in a note. Goodbody stockbrokers said in a note that trading multiples in the sector "can be far in excess of 20x EBITDA."

($1 = 0.8482 euros)

(Reporting by Atharva Singh in Bengaluru, Conor Humphries and Padraic Halpin in Dublin; Additional repoting by Danilo Masoni; Editing by Mrigank Dhaniwala, Louise Heavens and Mark Porter)