According to the Business Spectator’s Prashant Mehra (The Australian Business Review 21/11/14), vacuum cleaner retailing business Godfreys’ IPO is being priced at 9.6 times the forecast net profit, after an institutional ‘bookbuild’ was completed 20 November.
Mehra explained that the company had earlier offered shares in an indicative price range of $3.37 to $4 each, equating to a price-earnings range of 10.5 to 12 times. The offer will now raise around $83 million, instead of $90.2 million planned earlier.
The IPO prospectus was lodged 21 November with shares set to float on the ASX on 9 December. The offer comprises of a sell-down by existing investors and a fresh capital raising for the company.
Godfreys, which operates more than 200 stores across Australia and New Zealand, is forecast to report EBITDA of $22.1 million for the 2015 financial year.
Family-owned for many decades, Godfreys was acquired by Pacific Equity Partners and Unitas Capital in 2006 for about $300 million. However, the two private equity firms exited — at a loss — under a debt-for-equity swap deal in 2011.
CBA and Credit Suisse are the lead managers for the offer.