Vocation IPO prices top of range

DataRoom: Education business' float to raise $253m after strong demand.

Vocation Ltd, the company that is the result of a merger of three closely held vocation and training businesses, has priced its initial public offering at $1.89 a share, the highest end of an IPO price range after investor demand outpaced supply for a share sale that will raise $253 million.

Vocation will sell 67% of the company to investors or 134 million shares out of a total of 200 million shares.

The indicative market value of the company is $378 million and the IPO is priced at 15.3 times 2014 forecast earnings. The offer closed a week earlier than scheduled due to solid demand.

Investors have sought allocations of stock from underwriters Macquarie Group Ltd and UBS AG because of what they see as Vocation’s growing earnings profile as increasing numbers of people demand vocational training to boost skills in order to get a better jobs.

The three companies that have merged to form Vocation are Avana, Bawm Group and Customer Service Institute of Australia. Former Macquarie Capital head Michael Carapiet, who retired in 2011, has been involved in Avana’s business.

Macquarie and UBS are ranked first and second respectively in the Australian IPO league table in the year to date, according to Bloomberg data. Both firms have done two deals in 2013, but Macquarie’s IPOs have raised $773.4 million and UBS’ IPOs have raised $475.5 million, according to Bloomberg.

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