Veda seeks to raise $340 million in a December IPO

Pacific Equity Partners will retain a majority stake in the credit-checking company.

Pacific Equity Partners has secured cornerstone investors for the initial public offering of Veda, making it confident the credit-checking company can raise $340 million through a December sale of new shares.

Australia’s largest private-equity firm is not selling its shares in the IPO. It will have a 60 per cent stake in Veda after the share sale.

The IPO is forecast to give Veda a market value of $1 billion. The deal is priced at 12.5 times proforma 2013 earnings before interest, tax, depreciation and amortization (EBITDA) of about $100 million.

Veda operates primary credit bureaux in Australian and New Zealand and is now a principal source of consumer credit information. The company forecasts that demand for its data-driven services will increase as consumers seek not only information about themselves but ways to ensure they are not subject to fraud and misreporting of their true financial position.

In March next year, comprehensive reporting comes into effect that will open up additional information about consumer accounts and how well they meet repayments. Consumers in the US and UK have used access to their own data to improve their personal finance deals with banks and other lenders.

UBS AG and Citigroup Inc are the lead managers of the IPO and have fully underwritten the deal. Highbury Partnership Ltd, the boutique investment bank run by former JPMorgan Chase & Co investment bankers Matthew Roberts and Alan Young, are also advising Pacific Equity Partners. 

UBS ranks second in underwriting Australian IPOs in the year to date, according to Bloomberg data. It has a 25 per cent market share in the local IPO market, having underwritten $475.5 million worth of deals.

Macquarie Group Ltd is the number one ranked firm with a 41 per cent market share of Australian IPOs. It has underwritten $773.4 million of deals. 

Veda will be Citigroup’s first Australian IPO lead manager role this year, according to Bloomberg.

The private equity firm, started in 1998, last raised a $4 billion capital pool in 2008 that is Australia’s largest private equity fund.

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