Aconex revisits float plans with smaller, discounted offering

Aconex is back on track to float after its revised initial public offering secured $140 million from cornerstone investors.

A few weeks ago, the construction industry software provider took the unusual step of abandoning a plan to raise $230 million at $2.20 a share, following advice the stock was unlikely to receive enough support to perform well at listing.

But joint lead managers Macquarie and UBS have now completed the institutional book-build for the re-engineered Aconex IPO, raising $140 million at $1.90 per share.

"We had covered the book for a $230 million raising, but then the market came off, risk aversion was on the rise, investors were displaying a bit of IPO fatigue, and we wanted to make sure it traded well," Macquarie head of equity capital markets origination Mark Warburton said.

"The pipeline of technology companies coming to market is stronger than it has ever been. We are developing a really good local tech sector, but for that to work out this deal has to trade up."

Macquarie and UBS returned to Australian and Asian institutional investors that had supported the original Aconex IPO deal to cornerstone the new smaller, more competitively priced raise.

The new deal also doubles the amount of existing shareholder stock held under voluntary escrow arrangements to more than 85 per cent. A large portion of these escrow conditions will expire after the 2015 results are announced.

An updated prospectus is expected to be lodged with the regulators as early as Monday, after the new deal was struck on Friday and inked at the weekend.

Exactly how much additional stock is to be made available in a small retail offer was still being determined. The listing is slated for December 9, 2014.

Australia's top two investment banks may have managed to convince Aconex founders Leigh Jasper and Rob Phillpot to give up $90 million in value so the float could be re-priced.

"We are currently working with a number of other large technology companies that plan to list in early 2015," Mr Warburton said.

One company Macquarie is advising is Singaporean online real estate portal PropertyGuru, which Mr Warburton confirmed is targeting a listing in 2015.

"Expect to see an increase in the number of south-east Asian technology companies listing in Australia," he said.

The listing of OzForex in 2013 kicked off the strongest wave of local large tech listings since the dot.com crash in 2001, including 3P Learning, Urbanise and now Aconex.

"Over the past decade, investors have seen online businesses like Seek.com, Carsales.com and Realestate.com grow in to multibillion-dollar companies that are global market leaders," Mr Warburton said. "So the willingness of investors to put in the work to understand the more complicated models used to value high-growth internet businesses is growing."

Aconex will be the biggest float of an unprofitable technology company in the history of the local market. At listing the company will have a market capitalisation of $312 million.

"The Aconex deal represents the next stage in the development of Australia's equity capital markets. It proves that the local bourse can compete with the Nasdaq in attracting globally significant companies," Mr Warburton said.

"It also shows that while the pricing has to be competitive, Australian investors are becoming more willing to accept valuations based on revenue multiples, rather than the traditional emphasis on profit."

Founded in 2000, Aconex is today considered the market leader in collaboration software for the global construction industry. The company has offices in 22 countries, serving customers in more than 70 countries. Profits from the Australian operations have been plunged into offshore expansion, with the group forecast to record a net profit in the year ahead.

Major international projects using the platform include the expansion of the Panama Canal, Hong Kong International Airport, Dubai Metro, Singapore's Marina Bay Sands and Battersea Power Station.