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Emeco launches $1.1bn IPO

PRIVATE equity investors Archer Capital and Pacific Equity Partners are aiming to double their money after West Perth-based earthmoving equipment supplier, Emeco Holdings Ltd, launched its initial public offering to raise $1.1 billion. The big winners from the IPO will be Archer and Pacific, which acquired Emeco in October 2004 for approximately $500 million. The IPO will be one of the biggest capital raisings on the Australian Stock Exchange in recent years, and the biggest WA deal since the float of construction company Multiplex. Emeco will offer between 450.8 million and 478.7 million shares, priced in the range of $2.10 and $2.50 each. Upon listing, Emeco will have a market capitalisation of approximately $1.3 billion and will be included in the S&P/ASX200 index. About half of the $1.1 billion to be raised from the IPO will be used to buy shares from the existing owners of the business, led by Pacific and Archer, whose combined stake will be reduced to 10.4 per cent. The company will also use about $350 million to reduce the group’s estimated net debt to about $250 million. A further $140 million will be used to acquire full ownership of Emeco’s UK business.

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Share Price

Closing price for the last 90 trading days
Source: Morningstar

Total Shareholder Return as at 31/08/18

1 year TSR5 year TSR
88thEmeco Holdings103%15%
288thAustralian Finance Group22%0%
345thUnited Overseas Australia9%9%
375thSouthern Cross Electrical Engineering6%-2%
646thVietnam Industrial Investments-34%20%
737 WA (and selected non WA) listed companies ranked by 1 year TSR relative to other companies with similar revenue
Source: Morningstar

Share Transactions

28/08/18
$0 Bought
28/08/18
$0 Other
25/05/18
$23k Issued
Total value as at the date of the transaction
Source: Morningstar

Revenue

13th↓Australian Finance Group$582.6m
14th↑United Overseas Australia$458.7m
15th↑Emeco Holdings$383.2m
16th↑Vietnam Industrial Investments$380.0m
17th↑Southern Cross Electrical Engineering$351.3m
237 listed industrial companies ranked by revenue.
Source: Morningstar

Remuneration from Emeco Holdings

42ndIan Testrow$1.092m
241stThao Vanderplancke$438k
607thPeter Richards$135k
Ranked by total remuneration from all listed WA companies

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