Revived vacuum retailer Godfreys set for Australia IPO

Godfreys is seeking to raise A$77.7 million ($66.4 million) through the sale of 28.2 million shares at A$2.75 apiece. Of the proceeds, A$39.3 million will go to existing shareholders, including Nomura and Investec, which will receive A$19.7 million between them and make a full exit. They currently own 29.2% of the company.

According to AVCJ Research, Unitas and PEP acquired Godfreys in 2006 for A$330 million (then $250 million). A consortium of lenders, including Nomura, Orchard Capital Partners and Challenger Management, took out the PE investors through a debt-for-equity swap in 2012. Nomura subsequently sold half of its investment to Investec.

A restructuring cut Godfreys' debt obligation from a reported A$210 million to A$20 million. The company reported a A$265.5 million charge in its 2012 financial results to cover the costs incurred. Company management also estimates that streamlining operations, automating processes and the removal of redundancies delivered annualized cost savings of A$4.2 million.

Godfreys was founded by Godfrey Cohen in the early 1930s and the business began to expand its store network across Australia and New Zealand in 1936 through a partnership with John Johnston. After selling to Unitas and PEP in 2006, Johnston was brought back by the creditors in 2011 and a trust in his name owns 43.8% of the company. This will fall to 20.2% post-offering.

Tom Krulis, a vacuum-cleaning industry veteran, come on board as CEO around the same time as Johnston. His 21.4% stake in the company will fall to 7.6% after the IPO.

Godreys has 209 retail outlets - 124 company-owned and 85 franchised stores - and several consolidation, distribution and service centers. The company sells its own brands, including Sauber, Wertheim and Pullman, and also holds the exclusive license for Hoover and distributes third-party brands like Bissell, Miele and Electrolux.

Pro forma sales came to A$173.5 million for the 2014 financial year, up from A$152.3 million in 2013. Net profit rose from A$8 million to A$10.8 million, while EBITDA grew from A$15.8 million to A$19.8 million. Pro forma sales are projected to be A$185 million in 2015, with A$12.2 million in net profit.

Commonwealth Bank of Australia and Credit Suisse are joint lead managers for the offering.

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• Topics
• Exits
• Restructuring
• Consumer
• Australasia
• Australia
• IPO
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• Consumer