Spotless $1bn IPO bookbuild set for May 20

Pacific Equity Partners will retain about a 50 per cent stake after the IPO, in which new and existing Spotless shares will be sold at between $1.60 and $1.85 each.

Spotless Group, the outsourced facility services provider owned by Pacific Equity Partners, will raise about $1 billion in the biggest initial public offering so far in 2014, according to an email sent to Data Room.

New and existing Spotless shares, between 378.5 million and 434.5m, will be sold at between $1.60 and $1.85 a share. The IPO is priced at 12.4 to 13.6 times 2015 forecast net profit per share. As much as $1.15bn worth of shares could be sold in the IPO if an over allocation option is exercised.

A bookbuild is scheduled to take place between May 20 and 21 to determine the final price. The IPO’s proceeds will be used to repay debt and enable private equity firm Pacific Equity Partners to profit from its investment. Spotless' market value may be as much as $1.93bn after the IPO and Pacific Equity Partners will retain a stake of about 50 per cent. 

Citigroup, Deutsche Bank and UBS are underwriting the IPO. The boutique equity capital markets and takeover adviser Highbury Partnership is advising the Spotless board on the IPO. The shares are expected to begin trading on the ASX on May 23. 

In the 12 months to June 30, 2013, Spotless had a net profit of $47.7m on revenue of $2.58bn through facilities management, food services, cleaning and laundry services. Spotless employs about 33,000 people.

In the 12 months to June 30, 2015, Citigroup expects Spotless’ EBITDA to increase to $305m and sales to rise to $2.7bn.

In the year to date there have been 12 IPOs that have been announced, 11 that have been priced and six that are trading, according to Bloomberg data.

(Reporting by Brett.Cole@businessspectator.com.au)

(Editing by miranda.maxwell@businessspectator.com.au)