Lynch Group has cut the price of its initial public offering to $3.60 per share and scaled back its raising to $206m.
Earlier, owners, including Next Capital, were looking to secure $315m and price shares at $4.05 each.
This equated to about 16.4 times its forecasted calendar net profit after amortisation.
However, now the price is about 15 times.
The book build for the float of the flower company was launched on Thursday and 80 per cent of the stock has been pre allocated to investors.
Earlier, fund managers had been told that they had received orders and indications in excess of the deal size ahead of the book build launch.
Funds raised would be partly used to pay for the remaining 80 per cent interest it does not own in its Chinese partner VDB Asia.
Terms of the float were sent out earlier this week and the business was to have a market value of about $484m, and it will now be $439.6m.
Next Capital will retain 35 per cent of the business while founding shareholders will retain 30 per cent.
Working on the float are JPMorgan, Jarden, Citi and Stanton Road Partners.
The group generates revenue through the sale of flowers into supermarkets such as Woolworths, Coles and IGA.
About 20 per cent of the flowers are grown out of China for its Australian sales and the remainder are sourced from Australian growers.
The company’s Australian business accounts for about two-thirds of earnings.
The understanding is that Lynch hopes to grow earnings through its Chinese operations, which largely consists of floral farms with some flowers sold locally.
Lynch expects to generate annual revenue of about $316m and net profit after tax and amortisation of $28.7m for the 2021 financial year, up 140 per cent from the previous corresponding period.
This follows the impact from the global pandemic and after China increased costs from the previous corresponding period.
The company describes itself as the country’s largest floral wholesaler in Australia, providing 88 per cent of the supplies to supermarkets.
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