Bureau Veritas Plans to Raise EU1 Billion in IPO

Sept. 25 (Bloomberg) -- Bureau Veritas SA, the world's second-largest goods-inspection company, plans to sell about 1 billion euros ($1.4 billion) of stock in what may be France's biggest initial public offering this year.

Wendel, the Paris-based private equity firm that bought Bureau Veritas three years ago, would use the IPO to reduce its stake. The price range for the sale will be announced Oct. 9, Merrill Lynch & Co., which is helping to manage the sale, said in an e-mail to clients today.

Bureau Veritas's planned IPO, equaling Rexel SA's offering in April, comes as a weak dollar holds back sales growth. The Paris- based company, which certifies that ships are safe for sailing and that buildings meet code, forecasts revenue of 2 billion euros this year, up 8 percent from 2006. That compares with average annual sales growth of 15 percent since 1996, Bureau Veritas said.

``Valuations in the industry have come down,'' said Alex Barnett, an analyst at Jefferies International in Paris, who has a ``buy'' rating on the shares of larger goods inspection rival SGS SA. Bureau Veritas benefits ``from repeat inspections and a diversified business,'' which should lure buyers, he said.

Barnett estimates the IPO will value Bureau Veritas at 3.5 billion euros, about 21 times this year's profit, he said.

Bureau Veritas posts about 60 percent of sales in euros. The dollar traded at about $1.41 against the euro today, close to its record low.

Rival's Market Value

Shares of SGS SA, based in Geneva, are down 1.1 percent this year, compared with a 0.5 percent gain in the benchmark Swiss Market Index. SGS stock peaked at 1,607 Swiss francs on June 1, and is now at 1,343 francs, valuing the company at 10.5 billion francs ($9 billion).

BNP Paribas SA, Deutsche Bank AG, Goldman Sachs Group Inc., HSBC Holdings Plc and Societe Generale SA are managing Bureau Veritas's IPO. Merrill Lynch is a co-lead manager along with Cazenove, AAR, Lazard Natixis, Oddo and JPMorgan Chase & Co., according to the Merrill note.

Shares of Bureau Veritas will be traded on Euronext Paris, Merrill said. Before setting the price range, the banks will survey investors on the sale. Bureau Veritas said July 11 that it was planning to sell shares to the public in the fourth quarter.

Wendel stock fell 0.1 percent to 122.55 euros in Paris today, valuing the firm at 6.2 billion euros.