Poland's Mercor launches IPO, plans to raise 73 mln zlotys to finance growth

Polish fire protection systems maker Mercor plans to raise 73 mln zlotys from its initial public offer (IPO) in Warsaw to finance acquisitions as it bids to becoming a top European player.

The whole offer, which is also to include existing shares, will be worth more than 200 mln zlotys, as the company set the IPO price range between 33 and 41 zlotys. Mercor plans to enter the Warsaw bourse on July 19, allowing new investors to own up to 49 pct of the company's enlarged capital.

'The construction market is set to rise by at least a few percent in the coming years, and the rise of the construction market means a rise in demand for fire protection systems,' Mercor's chief executive Marian Popinigis -- owner of a 31.3 pct company stake -- told a news conference.

Polish exporters have boomed in the last five years thanks to the removal of duties on EU entry in 2004 and low costs of labour and operations which give them a competitive edge over many western competitors.

Mercor raised its net profit in 2006 by 41 pct year on year to 15.8 mln zlotys, while sales almost doubled to 221.2 mln zlotys, also thanks to its acquisition of Czech peer Hasil.

Mercor says it leads the market in Poland, the Czech Republic and Slovakia, valuing the market at 1 bln zlotys.

'There is a chance to become a leader on a European scale,' Popinigis said. 'The European market is not very well-consolidated, which gives us a shot at dynamic growth by acquisition.'

The company, which produces equipment ranging from fire doors to fire ventilation systems, set up subsidiaries in Romania and Ukraine last year, as well as opening an office in Moscow.

'We are talking with a few, not more then ten potential acquisition targets, most of them foreign,' said Mercor's deputy head Krzysztof Krempec -- who also holds a 31.3 pct stake.

Source: forbes.com