Latitude Financial valued at between $2.59bn and $4bn

Latitude’s Ahmed Fahour. Picture: Jane Dempster

Latitude Financial could list as a business worth between $2.59 billion and just over $4 billion, according to research analysts from Macquarie Capital.

According to Macquarie, Latitude is expected to produce annual net profit of between $236m and $288m, and the company should be priced at between 11 and 14 times its net profit.

Latitude comprises the assets of the former Australian GE Capital consumer business and was acquired by a consortium in 2015 for $8.2bn, including debt.

Run by Ahmed Fahour, the business offers consumer finance through a variety of services, including personal loans, credit cards, car loans, personal insurance and interest free retail finance.

Goldman Sachs, Macquarie and UBS are working on an initial public offering.

The Australian’s DataRoom column revealed in September that Latitude had started briefing analysts for an initial public offering that was slated for October or November.

The Australian also exclusively revealed on Thursday that the company was on track to price at around 13 times its earnings, with the research supporting the valuation due to be released any day following meetings between fund managers and chief executive Ahmed Fahour.

The float of the non-bank lender comes after its promotion this month of its new buy now pay later payment system, which will take on market darling Afterpay.

LatitudePay has been adopted by retail powerhouse Harvey Norman, and the retailer will offer the interest free service for purchases under $1000 as its sole buy now, pay later platform.

Should an IPO proceed, Latitude is likely to be the largest float this year.

It would come at a time when market conditions for listings are somewhat subdued, and against a backdrop of softer retail sales and a weak economic outlook.

When Latitude attempted to list in 2018, the expectation was that the business would be worth about $5bn.

Owners of the lender include Kohlberg Kravis Roberts, Varde Partners and Deutsche Bank.

As of 2018, the company had a 6 per cent market share of Australia’s personal lending market and is the country’s largest non-bank lender in the consumer credit space.

The company began as the Australian and New Zealand personal finance and motor dealer finance operations of AGC, Australian Guarantee Corporation, which GE Capital purchased from Westpac in 2002.