Ampcontrol cranks up volume for IPO as Kinetic seeks momentum

An initial public offering of the engineering services company Ampcontrol appears to be back on the agenda, with some suggesting the business may head to the boards as early as December.

It comes as the management of Ampcontrol, which is 43.3 per cent-owned by Washington H. Soul Pattinson, presents at the Morgans Queensland annual investor conference in Brisbane this week.

Late last year, Ampcontrol made plans to float, but the deal was suspended on the back of market volatility.

When it tried to list last time around, the total proceeds for the offer were $100m, and the company was ascribed a market value of $184.6m.

Ampcontrol specialises in electrical engineering and control systems including transformers, power distribution, electronic equipment and electrical protection.

Last year, the plan was to embark on a listing to pay down debt and its price equated to 13 times its forecast net profit for 2019.

At that time, Bell Potter and Morgans were handling the listing.

Ampcontrol is returning to the boards with Morgans on board as MPC Kinetic also looks to list after last year suspending IPO plans when markets hit a volatile patch.

The company was formed in June last year following the merger of MPC Group and Kinetic and offers service to customers across the majority of CSG activities.

MPC Kinetic has a leading share of major pipeline construction in Australia and is a new entrant to wind farm construction.

Its primary focus is on the upstream operations in the CSG industry in Queensland, from which it historically has secured two-thirds of its gross profit and it expects the development of new wells to meet gas demand to propel its earnings higher.

The bookbuild is happening on Thursday ahead of a listing on October 29.

While MPC Kinetic is seen as a good business, some prospective investors believe it carries a high price and question whether a big enough amount of stock will be sold to retail investors to lock in demand for a transaction.

Fund managers have been told that MPC Kinetic, which counts Credit Suisse and UBS as its joint lead managers, will sell shares in the company at $2.50 each, which takes the company’s market value to $453.4m with the enterprise value at $421.8m.

The company is offering a dividend yield of between 2.3 per cent and 3.5 per cent.

Owners SCF Partners and Viburnum are each selling down 35 per cent of their pre-IPO shareholding and about 47.3 per cent of the shares will be held in escrow.