Lederer set to bring home more bacon
WESTERN Sydney Wanderers soccer club chairman Paul Lederer could be in for a windfall through the sale of the $1 billion bacon and salami producer Primo Smallgoods, which also happens to be based in Sydney’s west.
There is talk in the market that the business his family co-founded is being circled by the world’s largest food processor — Brazil’s JBS.
Primo is 70 per cent-owned by private equity firm Affinity Equity Partners, while the remainder is said to be in the hands of the founding Lederer family.
Some believe the business is worth at least $1bn and any sale would come just three years after it was snapped up by Australian Consolidated Foods Investments, owned by Hong Kong-based Affinity.
Reports at the time suggested the deal valued the company at $740 million.
Founded in 1985 by Andrew and Paul Lederer, Primo Smallgoods is based in Chullora, and is the largest producer of ham, bacon and other smallgoods in the southern hemisphere.
It has grown from 38 employees to become the country’s largest smallgoods manufacturer, with more than 4000 staff.
While Primo is not widely known to be publicly for sale, market sources say an exit by Affinity would not be surprising. The company did not return calls to DataRoom.
Some question whether Primo is also being earmarked for a float, suggesting it could command strong investor appetite, given lack of similar offerings in the last initial public offering rush.
However, the industry has been battling tough conditions, with figures from IBISWorld suggesting stagnant earnings growth prospects in the years ahead.
Brazil-based JBS, meanwhile, could be showing interest in the business as it may also target New Zealand-listed meat processing co-operative Silver Fern Farms, based in Dunedin.
Silver Fern, said to be worth about $NZ400m ($362m), is earmarked for a recapitalisation plan through adviser Goldman Sachs. Some sources dismissed suggestions that private equity group Terra Firma was a likely bidder.
Health is all the rage
INVESTORS may be focusing much of their attention on the $4.3bn-plus float of Medibank Private, as the institutional bookbuild for the government insurer gets under way this week.
But also at the forefront of the minds of investors is the float of the aged-care business Estia.
Some expect the private equity owner Quadrant to triple its money on the investment, with what is shaping up to be strong investor demand. Estia is expected to be priced between 20 and 23 times earnings, starting at $5.20 a share.
The company will hold briefings for institutions today.
SurfStitch’s fluid float
ONLINE surfware retailer SurfStitch is another prospect shaping up to be popular among investors.
Fund managers that already own part of the company, including Ausbil, Regal, Paradice and Quest, are opting to retain their holdings even when the company lists earlier next month with a market capitalisation expected to be between $280 million and $355m at the top end. SurfStitch founders Justin Cameron and Lex Pedersen are also expected to retain a significant holding in the company post-listing, suggesting a tight register.
SurfStich kicks off its institutional roadshow this week through Sydney, Melbourne and Asia, with management meeting more than 70 investors. The prospectus is set to be lodged on November 27.
The indicative price range of the IPO has been set at $1.40-$1.80 per share, a forward enterprise value to revenue range of 1.27-1.61 times.
The planned listing, slated for December 16, is set to raise $100m as part of the bookbuild. SurfStich generates about 65 per cent of its revenue outside Australia.
Total sales for financial year 2015 are expected to be nearly $200m. This represents a compound average growth rate of about 38 per cent from 2012.
JPMorgan leads the offer, with support from Bell Potter and Ord Minnett to manage retail interest.
Analysts have valued oOh! Media, which is also under investor scrutiny, at between $405m and $479m, equating to 14.8-18.1 times its net profit for the 2015 financial year. It compares to rival APN Outdoor’s pricing of 19.2 times forecasted net profit.
Kiwis join GE battle
IT seems not only Australian banks and global private equity giants like Blackstone and KKR are courting GE Capital’s $7.5bn Australasian consumer lending business known as GE Money: New Zealand financial institutions have joined the race.
Investment bankers across the Tasman are said to be lobbying for a break-up of the GE Capital-controlled operation.
Among the Kiwi contenders vying for the offering is said to be Heartland Bank, a New Zealand-listed finance outfit with a market capitalisation of about $NZ500m.
The bank was formed three years ago via a merger of four financial organisations and has a strong focus on the farming sector.
Information memorandums for the sales process were received last week, and GE has so far attracted strong interest from financial heavyweights both here and abroad.
The offering comprises mostly store finance, credit cards and personal loans for Australian and New Zealand customers.
Four hospital bidders
PALISADE Investment Partners has emerged as among the four shortlisted bidders for the $1bn Royal North Shore Hospital, according to sources.
AMP is frontrunner along with John Laing, while the fourth is said to be either Capella Capital or InfraRed.
Early contenders now out of the running are Queensland Investment Corporation and Hong Kong-based Cheung Kong Infrastructure, sources have said.
A preferred party is set to be chosen by Christmas.
On offer by vendor Royal Bank of Scotland is Infrashore, which effectively owns the asset.
Wise guys for Wisetech
CREDIT Suisse, UBS, Macquarie and Morgan Stanley are pitching for advisory roles in the float of the technology company Wisetech Global, earmarked to list on the ASX next year and worth up to $1bn.
Requests for proposals were submitted by the banks last week, and it is thought Credit Suisse could be in the box seat for a mandate, following the recent hire of the firm’s former banker Scott Colvin. Sources suggest UBS and Morgan Stanley are the most likely candidates to float Bain Capital’s $2.5bn accounting software business MYOB next year.
A successful float of Aconex this year could bode well for the float of Wisetech.