PE-owned Latitude cancels Australia IPO

Explaining the decision, which was taken following the conclusion of the book-building process, Latitude chairman Mike Tilley noted the “importance of ensuring a strong after market for the company.” The target price, originally set at A$2.00-2.25, was reportedly lowered to A$1.78 to stimulate interest. However, there were concerns the stock would slump once trading began.

Had the offering priced at the top end of the range, Latitude would have raised A$1.4 billion ($946 million) and achieved a market capitalization of A$4 billion. Nearly one quarter of the shares sold would have come from existing investors. KKR and Värde Partners each own 35% and planned on reducing their stakes to 20.5% and 20.6%, respectively. Deutsche Bank would have gone from 30% to 12.9%.

"While it is disappointing that we are not in a position to progress a public listing at this stage, we will continue to execute on the growth strategy with the support of our shareholder group," Ahmed Fahour, managing director and CEO of Latitude, said in a statement.

Latitude – which was GE Capital’s Australia and New Zealand consumer lending unit until sold to the PE consortium for A$8.2 billion in 2015 – is a digital payment, installments and lending platform. It offers installment payment products, issues credit cards, and brokers personal and automobile loans. These are distributed directly to consumers and through a network of more than 1,950 merchant partners that operate 9,000 online and physical outlets in Australia and New Zealand.

As of June, Latitude had 2.6 million customer accounts, including 1.84 million active accounts, and gross loan receivables of A$7.7 billion. Total operating income – of which nearly 90% is net interest income – came to $889.5 million in 2018 financial year, up from $845.8 million in 2017. Over the same period, net profit rose from A$33.6 million to A$57.5 million.

Local retail investor appetite for financial sponsor-backed IPOs has been muted in recent years. Between 2014 and 2016, A$10.2 billion was raised through 41 offerings. There have been 14 since 2017, including three this year, with proceeds reaching A$262 million. Most of the companies that listed were technology start-ups.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Australasia
• IPO
• Financials
• Australia
• KKR
• Varde Partners
• Deutsche Bank
• Financial Services