Morgan Stanley analysts are estimating that the market value for a float of Ironbridge Capital’s IVF company Monash should be up to $557 million.
It was previously thought to be worth $400m.
But Morgan Stanley analysts had assigned to Monash a price earnings ratio of 15.2-17.7 times, equating to a market capitalisation of between $491m and $557m.
Macquarie’s analysts have even higher expectations — a PE ratio of 15.7 to 19.1 times.
Fund managers said they thought the company’s market capitalisation should be closer to 14 times its earnings, adding that at first glance it was unclear how Monash could justify a price premium, given that it did not seem too dissimilar to rival Virtus Health.
Private equity firm Quadrant successfully floated Virtus Health last year at an issue price of $5.68, equating to a PE ratio of 16.5 times. The shares were trading yesterday at about $7.58.
Monash IVF is Australia’s second-largest IVF provider.
Ironbridge, which has offices in Australia and New Zealand, invests in companies with an enterprise value between $50m and $250m, specialising in healthcare, financial services and outsourced services.
Its combined funds have $1.5 billion of committed capital, with an investor base drawn from more than 40 leading global institutions.
Macquarie analysts have crunched the numbers for upcoming floats, with Peter’s Ice Cream and SCA Hygiene expected to happen in the coming weeks.
The Australian first flagged on March 4 that speculation was mounting in the market that PEP was leaning more towards a float of Peter’s than a trade sale, which was played down by sources at the time.
Advisers were holdings meetings in Sydney and Melbourne this week for upcoming IPOs, including Monash, Peter’s and 3P Learning of Mathletics, coinciding with the timing for the bookbuild for the $2bn mortgage insurance company Genworth, which will list on May 23.