Quadrant-backed Summerset struggles on trading debut

The company raised NZ$123.6 million ($99.5 million) in the largest offering seen in New Zealand in two years, despite pricing at the bottom end of its indicative range. Quadrant retains 56% of Summerset, having only exited 41% of its overall holding due to maket volatility.

Quadrant first invested A$90.5 million in Summerset in 2008 after then owner AMP Capital Investors failed to take the company public a year earlier. The private equity firm bought a further 50% from AMP last year. Summerset has 2012 forecast pro forma net operating cashflow of NZ51.9 million and total investment properties of NZ$632.6 million. Post-tax profit is expected to be NZ$6 million in 2011 and NZ$9.7 million in 2012. Summerset's strong growth prospects are largely based on the expectation that the number of people in New Zealand aged 75 or over will double in the next 20 years.

Given the recent weakness in the capital markets, it is impressive that Summerset reached the bourse at all. A host of Australasian private equity portfolio companies have been forced to abandon listing plan in the last year, pushing some investors to seek trade sale exits instead.

Collins Foods, the Australian fast-food group owned by Pacific Equity Partners, is the only PE-backed IPO of note this year, raising A$201.8 million. That offering was also priced at the bottom of its indicative range but the stock still closed down 8%, having opened marginally below the IPO price.

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• Topics
• Australasia
• Exits
• Real estate
• New Zealand
• Australia
• Quadrant Private Equity
• IPO
• Exit
• Pacific Equity Partners