Japara shares rally on debut

Shares in the largest IPO to hit the boards this year surge 21% on listing, after a bookbuild that was heavily oversubscribed.

Shares in Japara Healthcare (JHC), a residential aged care company, jumped 21% in early trade on Thursday, in the biggest Australian IPO to date this year.

The shares opened up at $2.41 and rose to $2.42, compared with an initial public offer price of $2.

Japara was the second successful listing in a busy week for IPOs with three new companies hitting the boards. Beacon Lighting impressed with a 60% surge on its debut on Tuesday, while Genesis Energy is also due to list on Thursday.

Japara has 35 residential aged care facilities with 3,131 places, mostly in Victoria, and has ambitions to have as many as 5,000 places. Australia’s residential aged care sector has estimated revenues of $11.6 billion per annum.

The company raised $450.4 million for its IPO in a highly sought-after bookbuild that was two times oversubscribed. Adviser Macquarie Capital was swamped with about $1 billion of demand from institutions looking to take cornerstone positions.

Japara sold 225.2 million shares at $2 each, or 10.4 times 2015 forecast earnings before interest, tax, depreciation and amortisation.

The company is an amalgamation of two groups, a property and an operating company, which will be brought together by the IPO. Some investors will roll over their investment in one of the two companies into the new Japara and others will exit.

Macquarie was sole lead manager and underwrote the raising, with the broker offer conducted through CBA Equities and Morgans.

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles