FRONT STORY IPOs
Irish float drives Aussie market
Fineos highlights lack of major deals despite buoyant stock market
A modest IPO from an Irish software
company is shaping up as the biggest ASX
listing so far this year, providing further
evidence that the Australian market
remains in the doldrums.
At A$211m (US$146m), the proposed
listing of FINEOS will overtake the A$110m
mOATûOFûONLINEûLENDERû0ROSPAûINû-AYûTOû
become the most notable IPO of the year.
“In terms of IPOs, the Australian market
has been fairly quiet this year with an
ABSENCEûOFûHIGH
PROlLE ûBILLION
SIZEDûDEALSûINû
the pipeline,” said a Sydney-based banker.
“This year will be mainly dominated by
small-to-mid-cap listings. For bigger listings
we may need to wait until next year or the
year after,” he said.
Fineos is set to be listed on the Australian
bourse on August 20 after completing a
broker offer that runs from August 5–9. It is
offering 84.4m CHESS Depository Interests
at A$2.50 each, equivalent to 6.68 times
2019 forecast revenues. The implied fully
diluted market capitalisation is A$712m.
CDIs are instruments over underlying
shares that allow foreign companies to be
traded on the ASX.
The company is offering 40m CDIs,
representing 40m shares. A further 20m
COMEûFROMûFOUNDERûANDû#%/û-ICHAELû+ELLYû
and the remaining 24.4m primarily come
from Irish state agency Enterprise Ireland,
which is seling its entire 9.7% stake along
with selling from other smaller shareholders.
Fineos develops cloud-based software for
the life, accident and health insurance
industry. It reported revenues of €53.7m in
2018, up from €41.1m in 2017, and pro forma
NETûPROlTûOFûõMûAGAINSTûAûLOSSûOFûõM
+ELLYûSAIDûTHEû!38ûLISTINGûMAKESûSENSEûBECAUSEû
of the “strong alignment” with Australia. Fineos
generated 53% of 2018 revenues in Australia and
New Zealand. It serves six of the 10 largest life,
accident and health insurance carriers in
Australia and processes 100% of all accident
claims in New Zealand.
North America contributed 35% of
revenues in 2018, with 12% earned in Europe.
Proceeds from the IPO will repay an EIB loan,
be used to invest in R&D, expand products and
add sales, marketing and client account
management capabilities to support growth.
Macquarie and Moelis are lead managers
and underwriters.COMMODITY BOOST
Although the IPO market is anaemic,
Australian stocks are on a bull run. Last
Tuesday, the benchmark ASX200 hit an all-
time intraday high of 6,875.5, overtaking
the previous record set in November 2007
BEFOREûTHEûGLOBALûlNANCIALûCRISISû4HEûINDEXû
is up 20% in the year to-date.
That momentum drove a hugely
successful ASX debut on Tuesday for
-INNEAPOLIS
BASEDûBUY
NOW
PAY
LATERûLENDERû
SEZZLE, which saw its shares jump more than
ûABOVEûTHEû!û)0/ûPRICEû3EZZLEû
RAISEDû!MûFROMûTHEûmOATûATûAûVALUATIONû
of under A$400m.
However, market participants caution
that the ASX rebound has largely beendriven by high iron-ore prices that have
given a boost to mining companies.
-!ûANDûBUYOUTSûHAVEûCONTRIBUTEDûTOûTHEû
IPO slowdown as companies are looking for
alternative sources of capital, particularly from
private equity funds, according to the banker.
In June, online retailer Catch Group was
taken over by Wesfarmers for A$230m, after
it had been considering a A$100m IPO.
There were only 23 new ASX listings in
THEûlRSTûHALFûOFûTHISûYEAR ûDOWNûFROMûûAû
year earlier, according to local business
ADVISORYûlRMû(,"û-ANNû*UDD
)NûITSûMID
YEARû)0/û7ATCHûREPORT ûTHEûlRMûSAIDû
unfavourable equity market conditions and the
US-China trade dispute had hit the materials and
resources sector particularly hard, contributing
TOûTHEû)0/ûSLOWDOWNû-ATERIALSûHADûONLYûTHREEû
NEWûLISTINGSûINûTHEûlRSTûHALF ûCOMPAREDûWITHûû
in the same period in 2018.
Software and services – the other dominant
sector driving Australian IPOs – saw four listings
in 2019, down from six last year, the report says.
Current IPO hopefuls include oil and gas
services company MPC KINETIC, which is
aiming for a listing of about A$150m this
year through Credit Suisse and UBS, and food
franchise business RETAIL ZOO, which is
PLANNINGûAû!MnMûmOATûWITHû
Citigroup, Goldman Sachs and UBS.
HOME CONSORTIUM, an Australian retail
properties owner, is working with Credit
Suisse, Goldman Sachs and JP Morgan on a
proposed IPO that could value the company
at about A$1bn.
Candy ChanFerretti eyes €1bn valuation
Yacht builder is expected to seek 40% free-float
Luxury yacht builder FERRETTI is all set to
LAUNCHûITSû-ILANû)0/ûFOLLOWINGûTHEûSUMMERû
break, several people close to the deal
CONlRMED ûTARGETINGûAûMARKETûCAPITALISATIONû
of €850m–€1.1bn.
&ERRETTIûISûAIMINGûFORûAûûFREE
mOAT û
IMPLYINGûAûDEALûSIZEûOFûõMnõMû4HEûDEALû
is poised to launch in mid-September, with
pricing likely to come around a month later.
Primary and secondary shares will be offered.
The company has chosen Barclays, BNP
Paribas, Mediobanca and UBS as bookrunners.
Bankers have been in Italy familiarising
investors with Ferretti, which consists of eight
brands including the famous Riva yachts.
Ferretti is majority-owned by Chinese
conglomerate Weichai Group, which owns
around 86.8%. The other 13.2% is held by Italian
BILLIONAIREû0IEROû&ERRARI ûSONûOFû%NZOû&ERRARIûANDû
10% shareholder in the eponymous carmaker.
)TûHASûNOTûYETûBEENûCONlRMEDûWHOûWILLûBEû
selling in the IPO, although Weichai invested
seven years ago when it bought 75% of
Ferretti in January 2012 for €374m.
4HEûRECENTûADDITIONûOFû-ONACO
BASEDûYACHTû
brand Wally to Ferretti’s portfolio is anotherfactor behind the timing of the IPO. Ferretti
acquired Wally in January and said it plans to
invest €84m over the next four years.
As well as funding the new brand and
general growth, primary proceeds will go
towards deleveraging the company.
In the absence of a direct comp, early-look
meetings have focused on price discovery, and
investors view the company as a luxury brand.
Founded in 1968, Ferretti was previously
listed on the Italian stock exchange but was
taken private in 2003. The group was hit hard
BYûTHEûûlNANCIALûCRISISûANDûWASû
subsequently restructured by Weichai after
its takeover in 2012. In 2018 Ferretti recorded
Ebitda of €53m, down 10% on the year, but a
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Lucy RaitanoEQUITIES
China 66 Hong Kong 68 India 68 Japan 68 Singapore 68 Israel 69 Norway 69
South Africa 69 Spain 70 UK 70 United States 71 Structured Equity 74