09/11/2015 - 15:38

Wellard to raise up to $403m

09/11/2015 - 15:38

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Wellard managing director Mauro Balzarini is planning to sell a 60 per cent stake in the livestock export business through an initial public offering (IPO) that will be one of Western Australia’s largest.

Wellard to raise up to $403m

Wellard Group managing director Mauro Balzarini is planning to sell a 60 per cent stake in the livestock export business through an initial public offering (IPO) that will be one of Western Australia’s largest.

The IPO is aiming to raise up to $403 million, with $231 million of the proceed to be paid to the Balzarini family.

The family will also retain a 36.8 per cent shareholding in the company, with the balance to be held by staff.

The Perth-based company has lined up new directors to strengthen its board ahead of its listing on the ASX, which is scheduled to occur in mid December.

Automotive Holdings Group chairman David Griffiths will become Wellard’s chairman, while Brookfield Multiplex executive Sharon Warburton will join the board as a director.

Other directors include Mr Balzarini and chief financial officer Greg Wheeler.

The details of the IPO were contained in material sent today to professional investors by UBS, which along with Deutsche Bank will manage the capital raising.

The ‘pathfinder document’ shows that Wellard has achieved strong growth in sales and earnings in recent years.

Its total revenue jumped to $512 million in the year to June 2015 and is forecast to grow strongly to $607 million in the current financial year.

EBITDA has grown from $12.9 million in FY13 to $52.9 million in FY15 and is forecast to hit $76.1 million this year.

Similarly, the company has gone from a $400,000 loss in FY13 to a net profit of $23.7 million in FY15 and is tipping further gains to $46.4 million this year.

The company is looking to offer 240 million shares to the public, at a price between $1.39 and $1.68.

The proceeds will range from $333 million to $403 million, depending on the final price.

As well as cash payments to the Balzarini family, the proceeds will primarily be used to repay debt ($52 million) and bolster the company’s cash reserves ($65 million).

At the top end of the pricing range, Wellard would have a market capitalisation of $672 million, making it WA’s 16th largest company ahead of the likes of Monadelphous Group and Metals X.

The company’s core business is live cattle exports – in FY15 it sold 383,000 head of slaughter/feeder cattle to customers in five countries.

It also exported 6,000 tonnes of sheepmeat, and exports a small number of dairy and breeder cattle and sheep

Its key assets include five pre-export quarantine facilities in Australia (three) and Brazil (two), with plans for two more in Australia.

The company also owns five livestock ships and has contracted to buy a sixth purpose-built livestock vessel.

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