Anchorage-backed Dick Smith closes flat after $311m IPO

The company sold 156.6 million shares priced at A$2.20 apiece, generating proceeds of A$344.5 million for Anchorage and valuing the entire business at A$520.3 million or 7.4x forward EBITDA. Anchorage's holding has fallen from 98% to 20%.

Dick Smith said in a statement that Anchorage would remain a key shareholder, while company management retains an 11.5% stake in the business.

Anchorage bought the business from Woolworths in September 2012 for an initial A$20 million plus a share of any upside resulting from the private equity firm exiting the asset. Ahead of the IPO, Woolworths accepted a A$74 million payment in return for part of its rights to the float proceeds. The company has received A$24 million through the IPO.

Dick Smith recorded sales of A$1.3 billion for the 2013 financial year and EBITDA of A$23.4 million. Under the pro forma forecast for 2014, sales will reach A$1.2 billion while EBITDA increases to A$71.8 million. The company claims this expected improvement is the result of a significant transformation I the business through a program of strategic, customer, operational and cultural initiatives.

Anchorage typically targets underperforming businesses and turns them around before selling on to secondary or strategic buyers. The Sydney-based firm was set up in 2007 and closed its debut fund, Anchorage Capital Partners I, at A$200 million in April 2010. Fund II closed at the hard cap of A$250 million in April 2013.

Goldman Sachs and Macquarie Capital were joint lead managers for the IPO.

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• Topics
• Exits
• Australasia
• Consumer
• Restructuring
• Consumer
• Exit
• Anchorage Capital Partners
• Australia
• IPO