Direct Capital to exit New Zealand King Salmon

The company will sell 69.2 million shares, including 26.8 million new shares, at NZ$1.12 apiece. This would give it a market capitalization of NZ$154.5 million.

Direct invested in King Salmon in 2008, supporting a management buyout and taking a 45% stake in the business, according to AVCJ Research. It currently holds 46.1 million shares - a 41.85% interest in the company - and plans to sell 40.2 million of those through the IPO.

Majority owner Oregon Corp, a local investment company of Malaysia's Tiong family, will sell a small number of shares and maintain a 40% holding, according to a filing. The offer is scheduled to close next month.

"We are delighted New Zealand investors have demonstrated strong support for the initial public offering with demand exceeding the size of the offer at the final share price," John Ryder, King Salmon's chairman, said in a statement, adding that shares had already been allocated to institutions in New Zealand, Australia and Hong Kong. 

King Salmon claims to be the world's largest aquaculture producer of king salmon and is planning to increase its portfolio of seafarms from eight to eleven, allowing for a doubling in output.

Revenue came to NZ$114.1 million for the 2016 financial year, up 16% from 2015. EBITDA rose from NZ$12.4 million to NZ$13.8 million, while net profit slipped to NZ$2.6 million from NZ$6.3 million. For 2017, projected revenue is NZ$130.1 million, which would represent about a 60% increase during Direct's holding period. EBITDA and net profit are expected to hit NZ$21.1 million and NZ$10.1 million, respectively.

Direct has raised about NZ$800 million across seven funds since 1994. It has invested in 69 New Zealand and Australian companies, with investments typically ranging between NZ$15-60 million.

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• Topics
• Australasia
• Consumer
• IPO
• Exits
• New Zealand
• Direct Capital
• Agriculture