The initial public offering of Raphael Geminder’s packaging empire Pact Group will price at $3.80 per share, which would see it list with a market capitalisation of $1.12 billion on December 17.
As foreshadowed by DataRoom last night, the packaging giant will price at 8.5 times forecast earnings before interest, tax depreciation and amortisation for this year, of $202 million, putting it at the lower end of joint lead manager Macquarie Group’s predicted range. The float, which opened to institutional investors today, is set to raise $649 million.
Macquarie and co-lead manager Credit Suisse will seek to sell about 171 million shares, or about 57 per cent of Pact’s issued equity. It will come in at 13.4 times based on price-to-earnings and have an enterprise value of $1.721 billion.
As flagged by DataRoom, the IPO is set to price on Tuesday afternoon after bidding is thrown open to fund managers on Monday.
Post offer, PACT will have 294.1 million shares, including 117 million owned by Melbourne-based Mr Geminder. The Melbourne billionaire’s joint venture partner in Asia, Gary Wolman, will receive 10 million shares - the roughly 3 per cent not retained by Geminder or offered in the IPO - as part of PACT acquiring one of his businesses in the region.
Pact management will fly back to Australia on Friday night after spruiking the company in Los Angeles, San Francisco and the mid-west of the United States over the next few days. Management was in New York and Boston earlier this week, after visiting key investors in UK and Asia.
Macquarie, one of the joint lead managers, had valued Pact Group at $1.6 billion to $2.1 billion, using a multiple of 8.1 to 10.4 times EBITDA. However, co-lead manager Credit Suisse had put a lower range of the company, at between $1.6 billion and $1.8 billion.
Fund managers appear to favour Pact over fellow ASX-hopeful BIS Industries, saying it is a far more stable play. Unlike the private-equity owned BIS Industries, Pact has been a family-owned company and investors may have a more favourable view about investments made in the group.