The Kohlberg Kravis Roberts-owned Laser Clinics Australia is being tipped as one of the next candidates for an initial public offering ahead of the market debut of its smaller rival SILK Laser Clinics Australia on Tuesday.
KKR purchased Laser Clinics Australia in 2017 for $650m and it has since more than doubled in size.
A strong performance by SILK on Tuesday is likely to see its larger rival follow it to the boards.
It comes as other private equity firms assess listing candidates within their portfolios amid booming market conditions and low interest rates.
Australian rival private equity firm Quadrant is believed to be weighing a listing of its stake in New Zealand radio broadcaster MediaWorks with help of advisers Jarden and UBS.
Last week, Quadrant secured $1.24bn as part of its latest fundraising efforts, which were first flagged by DataRoom in October, and after success with the IPO of its online cosmetics retailer Adore Beauty.
Adore Beauty floated in October with a market value of $650m as the COVID-19 pandemic drove demand for online businesses.
Quadrant purchased a 60 per cent interest in the online retailer last year in a deal that valued the business at $110m.
Suggestions are that KKR will look to float Laser Clinics Australia after the IPO of SILK proved popular among fund managers.
SILK lists on Tuesday with a $163m market value and a $84m IPO after pricing shares at $3.45 each. It is expected to stage a strong debut after the IPO was not priced at the top of its range in the hope it would trade well in the aftermarket.
The IPO provided a windfall for its private equity owner Advent Partners.
In 2017, KKR worked with Macquarie Capital on its acquisition of Laser Clinics Australia, fending off competition from Bain Capital, advised by Citi, and the Morgan Stanley-advised API.
The business was founded in 2007 by Babak Moini and Alistair Champion. The network has grown in three years from 70 clinics to 150 in Australia and New Zealand, offering cosmetic injections, hair removal and skin treatments.
Such companies are sought-after, given that beauty treatments in Australia are appealing to a wider section of the population, with product innovation and declining service costs.
The market in Australia generates annual revenue of $5.4bn per annum and is expected to grow at an average annual rate of 10 per cent to $7.8bn by 2024.
A Grand View Research report estimates the Australian injectables market will grow at 25 per cent to 2024, while an IMARC report estimates the body contouring and fat reduction market will grow at an annual rate of 13 per cent to 2024.
SILK’s IPO price equates to 11.2 times forecast earnings before interest, tax, depreciation and amortisation for the 2021 financial year.
Highbury Partnership, Wilsons Corporate Finance and Ord Minnett are working on the listing.
The company has been described as one of Australia’s largest speciality non-surgical aesthetic clinic chains, offering a range of treatments and health and beauty services such as laser hair removal, injectables, skin treatments, body contouring and fat reduction services and facial skincare products.
It was co-founded in 2009 by chief executive Martin Perelman and has grown from a single clinic in South Australia to 53 nationally.
SILK is forecasting $53.5m in annual revenue for the 2021 financial year, equating to 66 per cent growth, and $14m of EBITDA.
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