John Laing flotation targets £865m valuation

John Laing, the British infrastructure group with hopes of overseas expansion, is seeking to secure a valuation of £865m from its initial public offering in what would be the first major UK flotation of 2015.

The company unveiled its intentions to float on the London Stock Exchange earlier this month, adding that it was aiming to generate £130m from an IPO to fuel global expansion efforts and "new investment commitments," particularly in the US.

On Thursday, the group set the indicative price range at between 195p-245p per share, giving it a market capitalisation of between £715.5m and £865.5m. The total size of the offer is expected to deliver a free float of between 30 per cent and 60 per cent.

Having offloaded its construction business for a nominal £1 in 2001 after miscalculating the costs of building the Millennium Stadium in Cardiff, John Laing became one of the pioneers of public-private partnership deals, which use private financing to deliver public works such as roads, rail and hospitals. It made pre-tax profits from continuing operations of £101.2m in the first six months of last year, when it also reported a portfolio book value of £740m

Increasingly it is targeting opportunities further afield, with 70 per cent of its business now abroad. Current projects include hospitals in Canada, roads in Poland and a sports stadium in Perth, Australia, that broke ground last month. The group has about £1.9bn of assets under management.

"Today's announcement represents an important milestone as John Laing takes another significant step towards becoming a listed company. With its proven track record and the increasing need for new infrastructure worldwide, we firmly believe that John Laing will continue to deliver value to shareholders," said newly-installed chief executive Olivier Brousse.

John Laing was taken private for £1bn in 2006 by its current fund manager owner Henderson. It subsequently listed parts of the business as separate funds: the John Laing Infrastructure Fund in 2010 and John Laing Environmental Assets last year, with John Laing remaining an adviser to both.

In December Balfour Beatty rejected a £1bn offer for its investment arm from JLIF, which then said it was disappointed by the decision and that it would continue to "evaluate all other options for unlocking the portfolio".

John Laing is being advised on the flotation by RBC, with HSBC and Barclays acting as book runners. Greenhill is advising on the float and Freshfields is the legal adviser.

Henderson has said that it will sell a portion of its shareholding in the float.

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