Booktopia aims to raise $43.1m in IPO and list on ASX in December

Online book business Booktopia has lodged a prospectus to raise $43.1m and list on the ASX in early December.

Booktopia chief executive Tony Nash at the company's distribution centre in Lidcombe in Sydney's west. Picture: Britta Campion

Online book business Booktopia has lodged a prospectus to raise $43.1m and list on the ASX in early December.

The company is offering 10.9 million shares and 7.9 million existing shares at $2.30 per share, giving it an implied market capitalisation at of $315.8m.

About $25.1m of the IPO proceeds will be used to fund growth and pay down debt, and nearly $18.1m will be paid to existing shareholders, the company announced on Monday.

Booktopia has a significant portion of the online book market stitched up, having acquired parts of the Co-Op business, as well as Angus & Robertson (which went into receivership) in recent years. Booktopia also distributes books to 700 bookstores, including to Dymocks and QBD.

The company said on Monday that it currently holds a 6 per cent share of the Australian book market and accounts for almost 15 per cent of total online consumer book sales in Australia.

“When it comes to buying books (online) in Australia, there’s not really anywhere else that you can choose from,” chief executive Tony Nash told The Australian.

A recent facilities upgrade saw the company’s daily shipping capacity lift from 30,000 books a day to 60,000. Proceeds from the IPO will allow Booktopia to increase its in-stock book capacity from 800,000 to 1.8 million units, as well as pay down debt.

Mr Nash, who co-founded the company in 2004, is staying on as chief executive when the company goes public, and has no plans to sell any of his shares in the IPO.

“Our listing is very much about the future of organisation,” he said.

Mr Nash said the IPO is oversubscribed.

Booktopia tried for an IPO four years ago but those plans were dismissed due to a lack of interest, when appetite for e-commerce stocks was limited and Amazon had just announced it would launch in Australia.

“It was really like trying to go down to the beach and sell ice creams on a nine degree mid-winter day to a family coming in from the Antarctic,” Mr Nash said.

“Today, with the pandemic, I think everyone has realised that e-commerce is absolutely front and centre.

“All the traditional retailers are also investing a lot and that’s really exciting for Australia.”

Booktopia was established in 2004 by Tony Nash, Simon Nash, and Steven Traurig. The company raked in $165.8m in revenue for the 2020 fiscal year, and is forecast to book $204.5m revenue for 2021.

Recent sales success has been partly due to the pandemic, as stuck-at-home Aussies look for ways to stay occupied, and as the trend towards physical books and away from screens gains momentum. The company expects that trend to continue, even as coronavirus restrictions ease.

“People are kind of getting sick of signing into the computer, and just getting too sick and tired of telling the kids ‘guys off the screen and do something else’,” Mr Nash said.

The offer is being managed by joint lead managers and underwriters Morgans and Shaw and Partners and is scheduled to open on November 10, before the company starts trading on the ASX on December 3.