Private equity firm Apax revved up a potential £2 billion float of used car market Auto Trader in the biggest public offering of the year so far in London.
Apax first bought into Auto Trader in 2007, buying a 49.9% stake from Guardian Media Group, and took full control of the business last year.
As equity markets recover from their wobbles last autumn and the FTSE 100 pushes to all-time highs, the climate for a float now looks far more favourable.
The buyout firm drafted in Deutsche Bank and Bank of America Merrill Lynch to bring the firm to market earlier this year.
Auto Trader began life nearly 40 years ago, generating a fortune for founder John Madejski, who later bought Reading Football Club.
The brand was an early adopter online, launching a website in 1996 before dropping its print edition entirely in 2013.
It enjoys a dominant position in the used car market with 35 million monthly visits to its sites — more than four times as many as its nearest competitor.
The site also carries nearly twice as many adverts as its nearest rival and around 80% of car dealers advertise with them.
The float plans come weeks after reports of interest in the business from US private equity firm Hellman & Friedman, which owns a German equivalent of Auto Trader.
The launch is likely to see Apax offload around 30% of the business, as well as netting paper fortunes for management including chief executive Trevor Mather.
Apax refused to comment on management stakes, although shareholders will be subject to “customary lock-up arrangements”.
The company will use the float funds and a new £550 million term loan to clear its existing debt pile.
In the year to March 30, the business generated continuing revenues of £237.7 million and underlying profits of £136.1 million. In the nine months since then, the company has grown sales another 8%, with profits up 16%.
