Investors warm to Nuix and Dalrymple floats as offer prices tipped to fall

Pricing for the initial public offerings of both businesses is shaping up to be lower than initially expected. Picture: iStock

Some institutional investors are believed to be warming to the idea of investing in the Dalrymple Bay Coal Terminal as well as forensic software company Nuix, with the pricing for the initial public offerings of both businesses shaping up to be lower than initially expected.

Brookfield is believed to be promising a 7 per cent yield for the Queensland terminal, with the private equity firm to retain a 49 per cent stake and the market value expected to be around $1.285bn, while Nuix is shaping up to list with a market value of about $1.7bn after many had earlier expected it would be over the $2bn mark.

The pricing for Nuix is expected to be between 8 and 9 times its forecast revenue for the 2021 financial year of $194m.

More details surrounding the price are expected to be known as early as Wednesday, with the book build for the IPO to be held on Thursday.

Morgan Stanley analysts earlier estimated that Nuix would be worth between 12.5 times and 17.5 times its forecast sales for the 2021 financial year.

Nuix generated $60.6m of earnings before interest, tax, depreciation and amortisation for the 2020 financial year, and the earnings before interest, tax, depreciation and amortisation is expected to grow to $64.1m on an annually proforma basis.

Meanwhile, it was earlier thought that institutional investors were not showing any appetite for buying into the Dalrymple Bay Coal Terminal, with much of the demand coming from retail investors.

Many institutional investors have been shying away from exposure to coal, due to concerns about the impact on the environment.

As reported by DataRoom on Tuesday, preliminary numbers suggest the market value of the Dalrymple Bay Coal Terminal will be $1.285bn, with the total IPO size expected to be around $643.5m and shares to be sold around the $2 to $2.15 range.

This was as Brookfield locked in Queensland Investment Corporation’s Future Fund as a 10 per cent investor and remained in search of an additional $515m from others.

Brookfield was earlier hoping to raise between $800m and $1bn for its IPO, with the terminal’s market value to be between $1.6bn and $1.7bn.