Engineering and IPO
The big talk this past week is the proposed float of mining services group Calibre Global, something of a favourite with The Note because we have tracked this company since it was in nappies.
Indeed, Calibre won a WA Business News Rising Star award back in 2005. It had gone from nothing at start-up in 2002 to 400 staff in just three years.
That spectacular trajectory has kept going, with the company’s employment base at 2,265, with more than 1,600 of them in Western Australia.
From what The Note hears, the financials have been fairly strong too. Earnings (before interest, tax, depreciation and amortisation) have risen from around $42 million in 2008-09 to about $75 million in the past financial year and are forecast to hit $93 million in the current financial year.
Revenue is set to go from nearly $300 million to a predicted $715 million in the same period.
At least that’s what we are hearing, as various financial services players take a peek at the IPO bookbuild offering run by UBS and Goldman Sachs.
Those results have allowed the group to put a valuation on the business of $478 million, slightly below the multiples that mining services were commanding even just a few months ago, according to the pundits, but still a hefty price tag.
Under the deal, Calibre is issuing new equity amounting to nearly 16 per cent of the company for $75 million.
That will leave UK private equity mob First Reserve Corporation with about 61 per cent, worth about $290 million. That is a big result given First Reserve took 75 per cent in May 2010 for a rumoured $110 million.
Furthermore, post-float, Queensland-based Connect Resources Services, a partnership between First Reserve and some Aussie mining management talent, will end up with 6.1 per cent, having also bought in during May two years ago.
According to The Note’s sources, that leaves the biggest local shareholder as founder and director Ray Munro, who will end up with nearly 12 per cent of the diluted equity, worth more than $55 million under the expected IPO price.
Management shareholders, including managing director Rod Baxter have more than 4 per cent and other employees will share in nearly 1.5 per cent.
The Note says good luck to them. It takes an entrepreneurial spirit to make something like this out of nothing in just a decade and create a local company that has challenged the traditional big boys of the business.