Keppel Infrastructure tipped for Link’s Pexa stake

Pexa CEO Glenn King. Picture: Jim Rice

Keppel Infrastructure is being touted as a likely bidder for Link Administration Holdings’ $900 million-odd stake in Property Exchange Australia.

Link’s investment bankers at Macquarie Capital and UBS are yet to start the sales process for the 44 per cent stake it owns, although flyer documents have already been sent to prospective suitors.

The sale has been prompted by Link being subject to a potential $2.9bn takeover proposal by The Carlyle Group and Pacific Equity Partners.

Also under consideration is a demerger of the Pexa stake, although the company has indicated that the trade sale process is the priority.

The buyout funds are carrying out due diligence on Link and are yet to put forward a formal offer.

This is after earlier informally offering $5.40 per share for the entire company or $3.80 per share excluding Link’s 44 per cent Pexa interest.

As earlier reported by this column, Macquarie Infrastructure and Real Assets is considered the strongest contender to buy the Pexa interest.

This is because MIRA owns land titles offices in Western Australia and South Australia, and already has rights to the data, which it could use to establish a way to monetise data through the partial Pexa ownership.

However, Kohlberg Kravis Roberts, advised by Jefferies, is also known to be a serious contender, while Partners Group, advised by JPMorgan, has been around the hoop.

PEXA’s earnings before interest, tax, depreciation and amortisation was $58m for the year to June, while it generated $155m of revenue for the same period.

The company became earnings postive in the 2019 financial year.

Keppel appears to have been active in the Australian market of late, with it also thought to be staying close to Bingo Industries, which is currently subject to a $2.3bn bid from CPE Capital and MIRA.

PEXA dominates the property transfers market, handling more than 70 per cent of all transactions nationally online.

The e-conveyancing company was established in 2010 as part of an agreement by the Council of Australian Governments to modernise the process of buying and selling property.

Its original shareholders were the state governments and the big four banks.

They were later joined by Macquarie Group, billionaire Paul Little’s Little Group and the then private equity-backed, and now listed, Link Group.

Pexa was acquired by a Link-led consortium in 2018 for $1.6bn.

Other consortium members included Morgan Stanley Infrastructure and the Commonwealth Bank.

Pexa at the time also considered a listing, hoping to achieve a price of between $1.8bn and $2.2bn.

Last year, the group had been embarking on a refinancing with assistance from Grant Samuel.

The company has been looking at options to expand into Britain and New Zealand, which have similar land transfer systems to Australia.