Latitude Financial to list at value of up to $4bn

Ahmed Fahour, CEO of Latitude Financial. Picture: Andrew Henshaw

The Ahmed Fahour-led Latitude Financial is expected to list as a business worth up to $4 billion on October 18, according to its prospectus.

The prospectus was released on Thursday with shares to be priced at between $2 and $2.25 each, as revealed earlier by DataRoom.

Latitude later told investors it had received interest for its IPO offering at various price points within its pricing range of $2 to $2.25 per share.

The indications were understood to have come from a small group of institutions that met with the company’s management before the IPO launch. The indications of interest equated to about one third of the offer size at the bottom of the price range, Latitude told fund managers.

The prospectus reveals that Latitude has 2.6 million customer accounts and more than 1950 merchant partners.

About 622.4 million shares with a total value of between $1.24bn and A$1.40bn will be offered to investors, with retail investors said to have a strong appetite to buy into the business.

The book build will occur on October 15 and 16.

Latitude owners KKR, Värde Partners and Deutsche Bank will continue to own about 54 per cent of the company, with the stake escrowed until the release of its annual results next year.

KKR will retain 20.5 per cent, Varde 20.6 per cent and Deutsche Bank 12.9 per cent while management and new shareholders will control the remainder.

“The business has a strong financial profile and solid growth forecasts, underpinned by ongoing investments in technology that will deliver new and satisfied customers and robust returns,” said Latitude chairman Mike Tilley.

Latitude managing director and chief executive officer Ahmed Fahour said with $7.7bn in gross receivables and a business that was profitable, Latitude was well positioned to capitalise on growth opportunities in the retail, service and finance sectors in Australia and New Zealand.

“Our 1950 merchant partners across more than 9000 outlets provide scale and distribution for our payments and instalments products, while our significant investment in technology and innovation will empower customers and attract new commercial partners,” he said.

The company is forecasting cash net profit of $287.6m for the 2020 financial year.

Earnings before interest, tax, depreciation and amortisation of $434.2m are also expected for the year ending 30 June 2020.