GemLife is now angling for a $1.57bn market value for its initial public offering on the Australian Securities Exchange, say sources, as it prepares to lock in cornerstone investors by the end of the King’s Birthday long weekend.
DataRoom understands the cornerstone process to gain commitments from key institutional investors is scheduled to complete by the close of business on Friday, although it may be drawn out over the long weekend, and the terms out in the market by Tuesday morning.
Preliminary indications are the market value will be $1.57bn with at least 50 per cent free float and an IPO valued at between $700m and $750m.
The business will list on July 4, according to its preliminary timetable.
Earlier, expectations were that the market value could be as high as $2bn, although the value of the company may be around that number should it carry debt.
DataRoom earlier reported the Puljich family owners were not selling any shares, and the pricing terms equate to about 15 times the group’s net profit.
So far, the deal is said to have been well received by institutional investors, with the commitment by the family operators to keeping skin in the game being one of the major drawcards.
Working on the IPO are JPMorgan, Morgan Stanley, Highbury Partnership, Ord Minnett and Morgans.
GemLife, it sells manufactured homes to the 50-plus section of the market on Australia’s east coast and is a dominant player in the Queensland market.
In 2022, when GemLife was for sale, Aware Super and APG were among the groups taking a look.
It describes itself as one of the fastest growing over-50s lifestyle resort operators, with 12 communities across Queensland, northern New South Wales and Victoria.
The company is headed by director and chief executive Adrian Puljich.
The play is for investors keen to gain exposure to a growth stock, rather than one generating a high yield, but offering momentum to GemLife’s sales will be falling interest rates, with further cuts from the Reserve Bank of Australia this year.
Opportunities to gain exposure to land lease are in demand from investors, as evidenced by listed rivals, Ingenia and Lifestyle Communities, which are both trading at over 17 times their net profit.
Investors are also likely betting on stronger demand for property with a housing shortage.
The moves to price the IPO of GemLife follows site visits for investors and a non-deal roadshow which extended to Asia.
It also comes as this week Bain Capital finalised a $685m IPO for Virgin Australia, with the country’s second largest carrier to return to the listed market on June 24.
The previously-listed airline entered voluntary administration amid the global pandemic in 2020 and was recapitalised by private equity firm Bain.
Working on the transaction are Barrenjoey, Goldman Sachs, UBS, Reunion Capital and retail brokers Ord Minnett and Wilsons.
The IPO book builds closed on Thursday for retail and institutional investors with strong support so far shown, and the prospectus will be lodged on Friday.
Add your comment to this story
Private equity starts preparing for revived Healthscope auction
New parties are knocking on the door of Healthscope’s receivers and will give not-for-profit operators a run for their money.
Citi head of ECM Rob Jahrling departs as John McLean returns
The managing director picking up the responsibilities has over two decades of experience in global capital markets.
To join the conversation, please log in. Don't have an account? Register
Join the conversation, you are commenting as Logout