DataRoom AM: IPO pot luck

The IPO pipeline is filling up with several large floats planned for 2015, as Australia’s first medical marijuana stock debuted on the ASX.

Half-yearly earnings season is almost upon us and while most of the attention is on the big ASX-listed names reporting their latest financial data in the coming weeks, the spotlight is likely to quickly shift to a flurry of new names expected to hit the market in March.

Elsewhere, GE Capital assesses the best way forward on the auction of its consumer lending operations, Seven West Media is added to the M&A watchlist and Jalco tilts toward a trade sale.

The list of significant IPOs on the cards for 2015 is growing as the KKR-backed GenesisCare tees-up February meetings with fund managers to promote a first-half float. The healthcare group can expect a valuation of over $800 million, according to The Australian Financial Review, which makes it one of the larger IPOs in the pipeline.

At this stage the largest listing of the year is likely to be the $3 billion float of MYOB, while FleetPartnersWiseTech Global and Adairs Retail Group could all command sizeable valuations when they hit ASX boards in 2015.

A number of the firms above could yet take the trade sale route, with Costa Group among the more likely IPO candidates to consider such an option. Costa Group patriarch Frank Costa has now made it clear that a trade sale is the preferred exit route, though an $800m divestment may still be 18 months away.

The developments come as the first medical marijuana stock in Australian history hit ASX boards on Thursday. PhytoTech Medical raised about $6m through its float and then more than doubled its valuation in one trading session as investors took a bet on some pot luck.

In finance, the race for control of GE Capital’s local consumer lending business could turn rather complex as law firm King & Wood Mallesons works on a securitisation package on behalf of the seller, the AFR reports. The plan would reduce the financial requirement of a potential $2bn takeover for the four interested consortia as they weigh final bids ahead of a March 10 deadline.

In media, speculation is swirling that Seven West Media could make a play for APN News & Media. According to reports, they would then separate out the print assets of a combined entity into a new business. However, while there may be some merit to a tie-up, at this stage there is no sign that Seven harbours any interest in a deal given a constrained balance sheet.

Meanwhile, Adrian MacKenzie, a man who was formerly heavily involved in the local media sector after organising the buyout of over $5bn worth of media assets from James Packer’s PBL Media almost a decade ago, has teamed up with other private equity heavyweights to make a run at payroll outsourcing business Talent2 International.

According to the AFR, MacKenzie and former Archer Capital employees Andrew Gray and Rishabh Mehrotra are running the numbers on a deal. At this stage it’s unclear what price would satisfy owner Allegis Group.

Elsewhere, Jalco has come under the watchful eye of two predators as a trade sale firms as the preferred outcome to a float. The FMCG contract manufacturing service provider could reap about $100m through a sale, according to the AFR, with an unnamed local firm seen fighting against a mystery multinational heavyweight for control.

Finally, Skilled Group has unsurprisingly knocked back an $800m merger with rival Programmed Maintenance Services and in the process its management team has put plenty of pressure on itself to perform, while personal finance start-up PocketCare is chasing a $12m valuation ahead of a possible 2015 IPO.

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