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German electricity grid equipment maker SGB-SMIT is in early talks for an initial public offering, marking the latest company to explore a listing on the back of surging demand for AI-linked assets.
One Equity Partners, the private equity group that owns SGB-SMIT, is speaking with bankers about a listing in Germany for the power transformer group that could value it at more than €4bn, according to people familiar with the matter.
A deal could take place as soon as early next year. The people cautioned that no final decisions had been taken and plans could shift.
Transformers are distributed along electricity grids to adjust voltage and current, allowing electricity to move safely between different circuits. The surging usage of AI and proliferation of data centres as well as the push to expand electricity grids have driven up investor interest in companies that support the soaring power demand.
Bavaria-based SGB-SMIT was established more than a century ago and is a major manufacturer of transformers. Its customers include utilities, grid operators and industrial companies with operations in countries such as the US, Netherlands, China, India and France.
The US investment group One Equity acquired the company in 2017 from BC Partners without disclosing terms of the transaction.
Investors in power equipment groups have also benefited from the AI and data centre boom.
Investment group Advent International is set for a major windfall after this month’s IPO for Innio, which sells power systems to data centres. Private capital groups TDR and I Squared are also expecting a hefty profit from their investment in the power supplier Aggreko.
An IPO for SGB-SMIT in Germany would add to an uptick in the number of European listings expected over the coming months, which has been dominated in part by companies in the defence sector.
The record-setting IPO of SpaceX in the US and plans by other major AI companies including OpenAI and Anthropic to pursue market flotations have heralded a milestone year for new listings.
Those deals have buoyed hopes, including among private capital investors that they will be able to take their companies public, enabling them to exit their investments.
One Equity declined to comment. SGB-SMIT did not immediately respond to a request for comment.
Additional reporting by Rachel Millard in London
