11/04/2014 - 14:35

$40m Pioneer IPO a 20-month high

11/04/2014 - 14:35


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Perth-based financial services group Pioneer Credit has outlined plans for a $40.2 million IPO, the largest by a Perth company in 20 months.

$40m Pioneer IPO a 20-month high
DRIVERS: Rob Bransby (left), Mike Smith, Keith John, and Mark Dutton form the team behind Pioneer Credit’s IPO.

Perth-based financial services group Pioneer Credit has outlined plans for a $40.2 million IPO, the largest by a Perth company in 20 months.

Pioneer Credit was founded by 2006 40under40 winner Keith John and backed by Banksia Capital, which has invested about $8 million in the business since 2010. These two partners, combined, will represent about 35 per cent of the equity after float.

Under the IPO, the company plans to raise $40.2 million by offering 25.2 million shares to new shareholders at $1.60 each.

The shares being offered represent about 55 per cent of the company and value the business at $72.2 million.

Prior to Pioneer’s proposed float, only four IPOs had been announced in the previous 12 months, the biggest of which raised $25 million, according to BNIQ.

The Pioneer IPO will also be the biggest since August 2012, when Calibre Group raised $75 million in its float.

There has been a recent steady flow of backdoor listings from Perth-based companies, however, including deals between Macro Energy and digitalBTC, Latin Gold and mig33, Spencer Resources and Bulletproof Group, and Minerals Corporation and PRM Cloud Solutions, among others.

The release of Pioneer’s prospectus comes the same week as a study revealed IPOs backed by private equity funds outperformed comparable non PE-backed floats.

Australian Private Equity & Venture Capital Association found 21 PE-backed IPOs since 2003 had posted an average return of 95 per cent since listing, compared with a 2.2 per cent decline for non PE-backed floats.

At least half the proceeds raised in Pioneer’s IPO has been earmarked for purchasing further debt, while about $11 million will be returned to existing shareholders.

Pioneer purchases bad personal loans and credit card debt from the major banks, and focuses on recovering those debts. Its model, though, is different from traditional debt collection agencies with which it is often compared, as it attempts to maintain a long-term relationship with the debtor.

The company is chaired by Michael Smith, a top-flight director and marketing professional who also chairs other consumer-focused businesses iiNet and Synergy, as well as being on the boards of Automotive Holdings Group and 7-Eleven Australia.

HBF managing director Rob Bransby is also on the board of the proposed ASX-listed company, while Banksia Capital founder Mark Dutton is another member of the board.

The company is forecasting revenue of $25.3 million for the year ending June 30 2014, with that figure expected to increase to $39.1 million the following year.

Evans & Partners is lead manager and underwriter and Azure Capital is financial adviser.


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