Rush to float pre-Christmas
The buoyant equity market has spurred a rush to float before Christmas, with Veda set to join the fray in an IPO that could value the credit information group at $1 billion.
The IPO will be the second biggest of the year after Nine Entertainment. The total initial capital raised for the calendar year is set to push past $13 billion, according to ASX data.
The initial capital raised in the year to October is already the highest since 2007, at just under $11.5 billion.
"The IPO market is well and truly open, with a flood of IPOs coming between now and Christmas," Wilson Asset Management chief investment officer Chris Stott said.
"We would anticipate that will continue into the new calendar year."
Veda will raise about $341.1 million through the issue of 272.8 million new shares at a price of $1.25. The IPO fees, at $35.6 million, will amount to more than 10 per cent of the funds.
The firm has forecast net profit after tax of $17.3 million for the financial year 2014, and a pro forma net profit after tax of $63.9 million.
"We hope to provide investors with a stable, resilient investment with opportunities for further growth," Veda chairman Helen Nugent said.
Pacific Equity Partners, which together with Merrill Lynch Global Private Equity acquired Veda in 2007, will retain 63.5 per cent of the capital. The private equity owners took full control in 2011.
Vocation, an education and training provider, also lodged its prospectus with the Australian Securities and Investments Commission on Monday. The offer comprises the issue of 134 million shares at a price of $1.89 a share, and raises just over $253 million.
"We are certainly a growth stock," Vocation chief executive Mark Hutchinson said. "We do have a fully franked dividend also forecast. For us, it is creating a trusted brand as one of the leading VET providers."
The latest IPO announcements follow the blockbuster debut of online jobs portal Freelancer, which saw its shares soar as much as 400 per cent when it listed on the ASX last week, briefly giving it a market capitalisation of $1.1 billion.
Freelancer was the 73rd company to list on the ASX this year as improving market conditions boosted the IPO space, which has seen tepid growth following the financial crisis. Upcoming floats include Dick Smith, Industria REIT Fund and Sandon Capital Investments.
"The main thing is that the market is very strong now," Will Seddon, of White Funds Management, said.
"If you look at the level [of where the sharemarket is] compared to where it's been over the last few years, for anyone that has been sitting on a business and wanting to pull some capital out over the last few years, now's the best opportunity in some time."
Mr Stott said investors needed to be selective about where they sink their money. Key pull factors include firms that can continue to grow regardless of the economic cycle, and those with low levels of debt, a strong management team and a good track record of earnings.
Notable 2013 floats
OzForex Group $439m
Virtus Health $345m