Pepper IPO wins institutional backing at a reduced multiple

Ian Rogers
Pepper Group's initial public offering attracted commitments from a dozen offshore and domestic investors, industry media reported yesterday.

Investors agreed to underwrite the float at a multiple of ten times forecast calendar year 2015 net profit, which equates to a price per share of A$2.60, down from a target multiple of 12 times earlier in the marketing.

It means the float is covered and a bookbuild will not be required. A prospectus is expected to be lodged by the end of the week.

The Australian Financial Review's Street Talk column reported that Perpetual, Regal Funds Management and Cadence Capital were among the investors that suppported the float.

Pepper's management and founders are not selling into the float and will account for around 45 per cent of the register after the listing.

The multiple was cut to ten times profit in a bid to garner strong support in the secondary market.

Pepper, founded about 15 years ago, has forecast revenue growth of 31 per cent to $304 million for 2015, and net profit growth of 34 per cent to $47 million.

Goldman Sachs and Macquarie Capital were the joint lead managers on the IPO.