PEP fully exits Australia-listed Link Group

Link said in a filing that PEP would offload 89.1 million shares, an approximately 25% stake. Meanwhile, Intermediate Capital Group (ICG) planned to sell 14.9 million shares - which also represents its entire position. The shares sold for A$8.38 apiece, according to local media; this was also the stock's September 7 closing price.

The move comes after Link exceeded the full-year revenue and earnings projections set out in its IPO prospectus. The company raised A$946.5 million through the offering last October and has traded above the IPO price of A$6.37 ever since. As of midday on September 8, the stock was down slightly at A$8.31.

PEP first invested in Link Group in 2005, when it bought leading Australian share registry Link Market Services (LMS) from Australian Securities Exchange and Perpetual Trustees Australia for A$132 million, according to AVCJ Research. The company acquired the second component of Link Group, fund administration services provider AAS, from Telstra Corp. in 2006, paying A$215 million.

ICG and Macquarie acquired a combined 28.1% stake in Link from PEP 2013. It was reported at the time that they paid around A$200 million, with Macquarie offering part of its holding to clients as a pre-IPO placement in expectation of a listing in 2014 at a valuation in excess of A$800 million.

PEP sold 38 million shares in the IPO, generating proceeds of A$242 million and reducing its holding from 52.9% to 30.3%. ICG and Macquarie sold 18.7 million shares and 9.1 million shares, respectively, leaving them with stakes of 10% and 4%. A partial exit came in April, with PEP and ICG each selling 21.7 million shares while Macquarie exited its entire position. Based on Link's April 8 closing price of A$7.42, the block trade was worth around A$390 million.

The public market sales alone have been worth A$1.15 billion to PEP. Its overall return is likely to be augmented by dividend recaps; the last reported refinancing for Link took place in 2013 and came to A$710 million.

Link manages financial ownership data for more than 2,500 clients worldwide, servicing an underlying stakeholder base of 10 million superannuation account holders and 25 million individual shareholders. It posted revenue of A$775.9 million for the 2016 financial year, up from A$588.3 million in 2015, while pro forma operating EBITDA rose from A$148 million to A$190.6 million. Pro forma net profit for the year came to A$73 million, up 24% on the IPO prospectus forecast.

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• Topics
• Australasia
• Open market
• Financials
• Pacific Equity Partners
• Australia
• Exit
• Intermediate Capital Asia Pacific