PEP-owned Spotless targets $928m IPO

A combination of new and existing shares will be sold at A$1.60-1.85 apiece. The proceeds will be used to repay debt, create a liquid market for Spotless shares and allow partial realizations for existing investors. The book-build is scheduled for May 20-21.

Shares sold through the IPO will represent around 51% of the post-offer shares on issue. The balance will continue to be held by PEP, its co-investors and Spotless management. They will enter into voluntary escrow agreements guaranteeing their ongoing participation in the company for a set period.

PEP agreed to take Spotless private in April 2012 after a protracted pursuit, which saw a majority of shareholders favor the deal while the board resisted it. The private equity firm paid A$720 million for all outstanding shares, with the enterprise valuation reaching A$1.1 billion. Coat hanger manufacturer Braiform was carved out from Spotless following the acquisition.

According to market sources, Spotless' profits have doubled since the privatization.

The company said in a statement that during this period, customer relationship management has been reorganized to focus on customer sectors rather than service lines; overheads have been reduced, labor productivity improved and loss-making and marginal contracts exited to improve quality of earnings and margins; and new potential contract opportunities have been identified representing approximately A$1.5 billion in annual revenue coming to market by the end of the 2015 financial year.

"Within the markets it serves, Spotless is the leader by revenue, scale and breadth of services," said Margaret Jackson, the company chairman. "Spotless is a strong business, with multi-year contracts and a large number of long term customer relationships. The business is well diversified across industries and services, allowing the team to offer truly integrated facilities management services to their clients."

Founded in 1946, Spotless now employs nearly 33,000 people across Australia and New Zealand, servicing more than 1,750 contracts covering facilities management, food and cleaning. Projects range from facilities maintenance for the New Zealand Department of Corrections to running non-match-day functions at the Melbourne Cricket Ground.

Nine private equity-backed IPOs raised a record $2.5 billion between them on the Australian bourse in 2013, although the market remains quite selective and the pace of listings has slowed in the opening months of 2014. Another PEP portfolio company, Veda Advantage, went public last December.

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

• Topics
• Exits
• Support services
• Australasia
• Pacific Equity Partners
• IPO
• Exit
• Australia