MYOB shares jump on ASX debut
Shares in MYOB have debuted at $3.91 on the ASX, giving the accounting software major a market capitalisation of $2.3 billion on listing.
The debut price compares to the $3.65 level for shares sold into the initial public offering. Nearly 20 million shares of the company had changed hands on the ASX within the first few minutes of trade.
The IPO raised $833 million in a two-day share bookbuild, marking Australia’s largest public offering since health insurer Medibank Private’s $5.7bn offer in November.
The listing is being closely watched by investors and other ASX-aspirants looking for cues on the outlook for the IPO market, which has softened this year amid a volatile equity market.
MYOB — which stands for Mind Your Own Business — is the largest player in the Australian accounting software market for small and medium enterprises. It was taken private in 2009 by Australian private equity firm Archer Capital, which in turn sold it to Bain Capital for about $1.2bn in 2011.
The company has forecast revenue to reach $323m this year, up from $299.3m in 2014.
Earnings before interest, tax, depreciation and amortisation are expected to hit $150.6m from $128.5m in 2014. Earnings growth will be largely driven by the conversion of non-fee paying desktop users to cloud-based products.
Local fund managers have called the pricing slightly expensive, with the offer price representing 23.5 times its forecast 2015-16 net profit after tax and amortisation.
MYOB’s largest shareholders include names such as JPMorgan, BNP Paribas, Citicorp and HSBC at the time of debut, and the share register is expected to be weighted towards international investors.
US private equity firm Bain Capital will remain the largest shareholder with 57.7 per cent in the company, down from 95 per cent. Bain will be eligible to sell a third of its stock following MYOB’s 2015 annual results under an escrow agreement, subject to certain conditions.
Chief executive officer Tim Reed also holds 1.2 per cent in the company.
