regis ipo, page-2

Regis worth up to 24.9-times profit, Evans & Partners says
EDITED BY SARAH THOMPSON, ANTHONY MACDONALD AND GRETCHEN FRIEMANN

ASX-hopeful Regis Healthcare should trade at up to a 30 per cent premium to the market to reflect its net cash position and strong free cash flow generation, according to Evans & Partners analysts.
Evans & Partners, one of three joint lead managers on Regis’ expected $500 million initial public offering, have valued Regis’s equity at $1 billion to $1.17 billion based on a mix of discounted cash flows and comparisons with peers.
The valuation implied a 21.4-times to 24.9-times price to earnings ratio, based on forecast 2015 financial year profit, and 14.2-times to 16.6-times on an enterprise value to earnings before interest and tax basis.
Evans & Partners said the wider ASX200 Industrials ex Financials index was trading at 13.6-times EBIT and 17.6-times profit.
The numbers are in line with fellow joint lead manager Macquarie Capital, which has valued Regis at $1.031 billion to $1.193 billion.
The analysts are marketing their respective research reports to institutional investors this week, ahead of an expected management roadshow next week.
Regis is expected to seek a $1 billion listing next month.
Evans & Partners pointed to Regis’s “strong pipeline of expansion opportunities”.
The aged care operator has plans to build 355 new beds across four facilities in the 2015 financial year, the broker said.