PRINT THIS PAGE IPO of Doughty Hanson's RHM successful19/07/2005. Source: AltAssets. 
 Pan-European buy-out group Doughty Hanson has successfully floated its portfolio company RHM (formerly known as Rank Hovis McDougall), a UK food producer, a business it first attempted to list in 2002. The offer price of the initial public offering of RHM shares was 275 pence per ordinary share, and it went up within hours as demand on the stock market was good.
The issue price of 275 pence was near the top of the offer price range, which was set at 228 pence - 285 pence on 5 July 2005.
Based on the offer price of 275p, the market capitalisation of RHM at the commencement of conditional dealings on the London Stock Exchange was £957.6m. Including net debt of £711m, RHM's enterprise value was £1.67bn.
Following the IPO, Doughty Hanson has retained a 33 per cent shareholding in RHM. If the over-allotment option is exercised in full, Doughty Hanson's stake will be 26 per cent. The total return on Doughty Hanson's equity investment in RHM, including its retained shareholding, is 3.4 times.
Doughty Hanson acquired the maker of Hovis and Granary bread from Tomkins in August 2000 for £1.18bn. The private equity firm was originally planning to float the company in late 2002 but scrapped this decision as a result of ongoing volatility in the equity markets.
John Leahy, principal, Doughty Hanson, said, 'RHM has been transformed under Doughty Hanson's ownership. Following its successful IPO, we believe that RHM's excellent management team will be very successful in leveraging both its brands and its scale to grow the business and to make it more efficient.'
Within the past three weeks, Doughty Hanson has completed two more exits: the IPO of Saft, a specialist in the design and manufacture of high-tech battery systems for industrial applications, on Euronext; and the sale of Priory Group, a UK provider of mental healthcare and specialist education services, to ABN AMRO for £875m.
Doughty Hanson has offices in London, New York, Chicago, Frankfurt, Milan, Munich, Paris, Prague and Stockholm.
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