Wangara-based contractor Duratec has launched Western Australia’s largest initial public offering this year,adding to a flurry of WA companies aiming to list on the ASX.
The pick-up in IPO activity has been led by junior explorers, mainly in the red-hot gold sector (see morebelow).
Duratec is a notable exception, after lodging a prospectus late last week with ASIC to raise $52.9 millionthrough its IPO.
Duratec’s IPO provides an opportunity for its major shareholders to cash in some of their holdings.Of the total proceeds, $24 million will be from the issue of new shares while $28.9 million will be a selldownby existing shareholders.Most notably, diversified contractor Ertech will cut its holding from 50.7 per cent to 19.9 per cent.Managing director Phil Harcourt, executive director Chris Oates and operations manager Deane Diprose,who jointly founded the company 10 years ago, are also selling down their holdings.
Duratec’s prospectus showed the company has achieved strong growth over the past three years.Its revenue increased to $247 million in the year to June 2020 while its net profit rose to $12.2 million.The company is heavily exposed to the Department of Defence, which accounted for 54 per cent of FY20revenue.Looking ahead, the company said it had an order book of $145 million as at 31 July 2020.
Duratec specialises in the protection and remediation of a range of assets, notably steel and concretestructures.Specific services include cladding replacement on high-rise buildings and treatment of bridges and dams.The business has 675 personnel spread across 15 offices around Australia.
Euroz Securities is lead manager and underwriter to the share offer, with EY acting as corporate adviserand K&L Gates legal adviser.The company will have a market capitalisation of $118 million at the issue price of 50 cents per share.
