Spotless expects to pay $58.5m in IPO fees

The facilities management company's prospectus says Spotless owner Pacific Equity Partners may be paid a $24.6 million fee.

Spotless expects to pay $58.5 million in fees associated with its initial public offering, much of it going to the company’s controlling shareholder Pacific Equity Partners, according to the company’s prospectus.

The Sydney-based private equity firm has established PEP Advisory IV, an advisor to the Pacific Equity Partners shareholders. PEP Advisory will be paid $24.6m, assuming Spotless prices its IPO in the mid range of its $1.60 to $1.85 per share offer. Between 378.5m and 434.5m shares will be sold in the IPO.

Pacific Equity Partners and its co- investment shareholders in Spotless will see their shareholding in the company fall to as low as 45.5 per cent after the IPO, from the current 93.1 per cent. 

Citigroup, Deutsche Bank and UBS will share fees of as much as $20.75m as joint lead managers of the Spotless initial public offering that may raise as much as $1.15 billion, according to the company’s prospectus and calculations by Data Room.

The joint lead managers will be paid a 2 per cent fee based on the total proceeds from the IPO or $23m. An incentive fee of 0.5 per cent based on the total funds raised may be paid to one or more of the joint lead managers.

Highbury Partnership may be paid as much as $5.75m as financial adviser to the IPO or up to 0.5 per cent of the funds raised from the share sale.

Gilbert Tobin, which acted as Australian legal adviser to Spotless in relation to the IPO, will be paid about $1m. The Sydney-based law firm could get further fees in accordance with its normal time-based charges.

Deloitte Corporate Finance, which acted as investigating accountant, will be paid as much as $1,35m. L.E.K. Consulting has acted as business adviser to Spotless and will be paid about $1.1m. Ernst & Young, which acted as taxation adviser to Spotless, will be paid about $400,000. Further amounts may be paid to Ernst & Young under time-based charges.

Evans & Partners, the co-lead manager of the IPO, will be paid a fixed fee of $350,000 by the joint lead managers. The broker may also receive a fee of 1.5 per cent of the value of its allocation of shares.

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

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