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Denmark's ISS aims for March 2014 stock market debut-sources

STOCKHOLM/COPENHAGEN, Nov 21 (Reuters) - Danish outsourcing firm ISS is aiming to make its third attempt to join the stock market as early as next March, three sources familiar with the matter said.

A listing on the Copenhagen stock exchange would follow a spate of initial public offerings (IPOs) in mainland Europe and could raise more than the $1.6 billion generated by German property group LEG's market debut in January - the biggest so far this year.

Based on comparisons with peers the share sale could value ISS, which employs more than 500,000 staff and operates on all continents except Africa, at as much as 50 billion Danish crowns ($9 billion) including debt.

Goldman Sachs and UBS will lead the IPO as global coordinators, the people said, meaning UBS has replaced Morgan Stanley in the line-up of banks that tried to float the company in 2011.

Nordea, Morgan Stanley and Barclays , which was not involved last time, are also acting as bookrunners, the people said, whereas Lazard has taken over the role of financial advisor to ISS and its owners from Rothschild.

EQT and Goldman Sachs, which bought ISS in 2005, declined to comment, as did all the banks. ISS referred to a previous statement that an IPO is being explored but no decision made.


Previous plans to list ISS, in 2007 and 2011, were dropped because of shaky stock markets.

Britain's G4S, the world's largest security firm by revenue, made a 5.2 billion pound ($8.4 billion) bid for ISS in 2011 which failed after opposition from its own shareholders.

Ontario Teachers' Pension Plan and KIRKBI, which invests funds from the family behind Lego toys, bought 26 percent of ISS for 3.7 billion Danish crowns last year.

Peers such as G4S have enterprise values of around 10 times EBITDA, according to Thomson Reuters Starmine data, a multiple that would value ISS at roughly 50 billion crowns, including debt. The G4S bid valued it at 44 billion and the OTTP and KIRKBI investment at around 40 billion.

ISS had net debt of 24 billion Danish crowns on Sept. 30, or 4.5 times EBITDA on a seasonally adjusted basis, a higher ratio than G4S.

Companies quoted on the stock market typically do not want to be much more indebted than their closest peers. With G4S's net debt about 3 times EBITDA, ISS would have to issue about $1.4 billion worth of new shares in the IPO to be on a par with its rival.

ISS made adjusted earnings before interest, tax, depreciation and amortization (EBITDA) of 5.1 billion Danish crowns ($925 million) in the 12 months to the end of September.

IPOs in the whole of Europe have raised a total of close to $30 billion this year, almost triple the amount in the same period of 2012, according to Thomson Reuters data. Britain's Royal Mail is the biggest by far, raising around $3.2 billion.