Bain considers IPO of France’s FCI: source

By Nina Sovich and Julien Ponthus

PARIS (BestGrowthStock) – U.S. private equity firm Bain Capital is “seriously considering” a stock market listing of FCI, a Versailles-based manufacturer of electrical connectors, a source familiar with the matter told Reuters on Monday.

The move comes after Bain tested the water for a potential sale and decided instead to list the company’s stock and take advantage of soaring share prices among electronic connector companies, several people said.

Goldman Sachs has been hired to handle the initial public offering (IPO), the source said. A second source with knowledge of the matter said the IPO would not happen until next year.

Goldman Sachs and Bain declined to comment.

Bain bought FCI, which designs and manufactures connectors found in laptops, cars and televisions, in 2005 from French nuclear reactor maker Areva (CEPFi.PA: ). The sale gave FCI an enterprise value of 1.06 billion euros ($1.49 billion).

However, in July 2009, Bain sold FCI subsidiary FCI Americas to Hubbell Inc for $360 million in cash.

With $1.31 billion in 2009 sales, FCI is the world’s fifth-biggest electronic connector maker, according to data from Illinois-based Bishop & Associates, ranking behind market leader Tyco Electronics Ltd (TEL.N: ), Tyco’s domestic U.S. rivals Amphenol Corp (APH.N: ) and Molex Inc (MOLX.O: ), and Japan’s JST.

Since late August, Molex’s shares have risen 28 percent, while Amphenol’s have risen 26 percent. Tyco’s are flat.

One analyst who follows the electrical connectors industry said that stronger stock performance in some connectors businesses, due to optimism that the economy would not go through a double-dip recession, could spur Bain to go through with the IPO.

“FCI has some exposure to autos, which is a cyclical business, but it also has good exposure to military contracts,” said the analyst, noting that FCI was a good performer in the sector but not as strong as rival Amphenol.

He added that the company was worth between seven and eight times earnings before interest tax and depreciation. FCI does not release earnings information.

A global rebound in the electronics industry has driven a 35 percent leap in connector sales in the year to August, according to Bishop & Associates data.

But Bishop forecasts full-year sales growth will slow to 23.6 percent, for a total $42.5 billion, and says 2011 sales will rise only “slightly” as world economic growth slows.

($1=.7124 Euro)

(Additional reporting by Quentin Webb; Editing by James Regan)

Bain considers IPO of France’s FCI: source