24/07/2007 - 22:00

NRW Holdings seeks $300m for IPO

24/07/2007 - 22:00

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Perth-based earthmoving contractor NRW Holdings Ltd has started an investor roadshow for its initial public offering, which is seeking to raise up to $300 million.

NRW Holdings seeks $300m for IPO

Perth-based earthmoving contractor NRW Holdings Ltd has started an investor roadshow for its initial public offering, which is seeking to raise up to $300 million.

The NRW deal will be Western Australia’s largest IPO this year, eclipsing Thinksmart’s successful $85 million float.

It will be the latest in a string of privately owned mining services companies to take advantage of strong growth in earnings by selling equity at a high price.

Mining contractor Barminco Ltd announced last week that it had sold a majority stake in the business to Gresham Private Equity, for an undisclosed sum.

Barminco founder Peter Bartlett will retain a substantial shareholding and continue to play an active role in the business, which is looking to accelerate its growth with Gresham’s backing.

WA mining services companies to have floated on the Australian Securities Exchange in the past two years include Swick Mining Services Ltd, Mineral Resources Ltd and Nomad Building Solutions Ltd.

In presentations to institutions this week, NRW has forecast a pro-forma net profit after tax of $40 million in the year to June 2008. This is understood to be a big increase on the group’s historic earnings and reflects its rapid expansion in recent years.

The IPO will raise between $260 million and $298 million, depending on the pricing of an institutional book-build.

Existing shareholders will retain a 40 per cent stake in the company, which is expected to have a market capitalisation of between $440 million and $500 million when it lists on the ASX in early September.

NRW’s big shareholders include Jeff McGlinn and John Silverthorne, who jointly established the business in 1994.

US hedge fund Stark Trading is also a big shareholder, with a 25 per cent stake.

Stark’s other WA investments include shares in failed biotech company Chemeq Ltd, drilling contractor Brandrill Ltd and Harvey Industries Group Pty Ltd, which owns the Harvey Beef business.

Among NRW’s staff, general manager Jules Pemberton, chief financial officer Gino Chiarelli, and operations manager Peter Miguel hold a stake in the business.

Non-executive director Lex Piper, who is also a shareholder, has prior experience at selling contracting businesses.

He was the owner and managing director of Piper Walker and Custom Contractor, and was one of the founding members of AWP Contractors, which was sold to CSR Ltd in 1995.

CSR sold the business two years later for $140 million to Downer EDI Ltd, which absorbed AWP into its Roche Mining business.

NRW’s float, which is being managed by global investment bank UBS, follows its acquisition earlier this year of engineering services company Action Mining Services.

NRW’s latest big contract was a slice of the civil construction work on Fortescue Metals Group’s Pilbara iron ore project.

FMG announced recently that NRW and a second big contractor, Brierty Pty Ltd, had been awarded fixed-price contracts associated with construction of its Pilbara rail line.

They join original contractor BGC Pty Ltd, which has a reimbursable contract for construction of part of the rail line.

FMG appointed the additional contractors to speed up construction of the rail line.

 

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