Spotless Group plans A$1 billion initial public offering

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Spotless Group plans A$1 billion initial public offering

Australia-based facility Management firm, Spotless Group Holdings Limited, today announced an offer of new and existing shares at an offer price of between $1.60 and $1.85 to raise approximately A$1 billion through an initial public offering (IPO).

The bookbuild is scheduled to take place on 20 and 21 May 2014 and 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.

The offer comprises:

  • A broker firm offer, which is open to Australian and New Zealand resident investors who are not institutional investors and who receive a firm allocation from their broker
  • An institutional offer, which consists of an invitation to bid for shares made to institutional investors in Australia, and a number of other eligible jurisdictions
  • A personnel and priority offer, which is open only to eligible employees and investors nominated by Spotless
Shares offered through the IPO will represent approximately 51% of the shares on issue on completion of the offer. Current shareholders - funds advised by Pacific Equity Partners (PEP), co-investors of those funds and Spotless Management - will retain approximately 49% of the company and will enter into voluntary escrow agreements.

Spotless chairman Ms Margaret Jackson said that, on behalf of Spotless' 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.

Ms Jackson said:

"Within the markets it serves, Spotless is the leader by revenue, scale and breadth of services. 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.

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."

Under private ownership since August 2012, the Spotless management team has restructured the business to focus on:

  • Customer relationship management
  • Quality of earnings and margins
  • Business development and pipeline growth
Spotless said its business has 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 the pro forma FY2013 sales revenue.

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