Spotless Group Holdings Limited today (28 April) announced an offer of new and existing shares at a price of between $1.60 and $1.85 to raise about $1 billion through an initial public offering (IPO).
The bookbuild, which is scheduled to take place on 20 and 21 May 2014, will determine the final price.
‘The purpose of the offer is to allow Spotless to repay debt, to enable others to invest in Spotless (creating a liquid market for the company’s shares) and to provide an opportunity for existing investors to realise part of their investment,’ said the company statement.
The offer comprises a broker offer; institutional offer; and a personnel and priority offer.
In August 2012 private equity firm Pacific Equity Partners (PEP) took the company private in a $723 million deal. PEP, co-investors and management will retain 49 percent of Spotless with the $1 billion float representing some 51 per cent of the shares on issue.
Spotless has revenue of about $2.5 billion and earnings before interest, tax, depreciation and amortisation of some $250 million.
Spotless chairman Margaret Jackson said that, on behalf of the board, she was pleased to offer shareholders the opportunity to invest in an iconic Australian company that is today a market leader and a major employer.
“Within the markets it serves, Spotless is the leader by revenue, scale and breadth of services,” said Jackson. “Spotless is a strong business, with multi-year contracts and a large number of long term customer relationships. The business is well diversified across industries and services, allowing the team to offer truly integrated facilities management services to their clients.
“It is a pleasure to work with Bruce (Dixon) as CEO and the Spotless management team as we continue to improve, enhance and grow this iconic company. We are a proud employer of almost 33,000 people across Australia and New Zealand and a proud service provider to many important local enterprises, agencies, organisations and projects.
“As Spotless embarks on its next phase and continues its implementation of business transformation and growth initiatives, it is well placed to take advantage of a growing facilities services market and a trend towards outsourced third party services.
“The business has identified potential new contract opportunities representing approximately $1.5 billion in annual revenue coming to market by the end of FY2015, with further significant new opportunities in adjacent services and sectors.”
Spotless chief executive Bruce Dixon said: “I believe Spotless is a great Australian company and I’m very proud to be working with the team to restore the company’s profitability and growth trajectory as we continue our journey.
“Within Australia and New Zealand, Spotless’ scale allows us to deliver a fully integrated multi-service offering. In these two geographies, we believe our national presence combined with local management gives us a competitive advantage.
“Our business is underpinned by a high quality customer base with more than 1,750 contracts, the majority of which are long-dated to five years or more. No single customer contract represents more than 4% of our pro forma FY2013 sales revenue.
“Our growth strategy is underpinned by stable underlying market growth, an increasing trend towards outsourcing in Australia, growth in market share in sectors where Spotless is currently under-represented and opportunities for expansion into adjacent markets and services.
“I am personally committed to pursuing our forward strategy and delivering on these opportunities. We look forward to further underlying growth in the market and we believe we are well placed to capitalise on the trend towards outsourcing.”