News: Pepper Group to raise $144.5M through fully underwritten IPO

Non-bank lender Pepper Group Limited is seeking to raise $144.5 million through a fully underwritten initial public offering priced at $2.60.

As at 31st December 2014, the specialist residential mortgage and consumer lender and loan servicer had $28.6 billion of assets under management (AUM).

It expects to continue growing its income and profitability in CY2015 with AUM forecast to increase 44.2% to $41.3 billion, pro forma income forecast to increase 30.8% to $304 million and adjusted net profit after tax by 33.9% to $47 million.

In CY2014, the company reported income of $234.9 million and net profit of $35.1 million.

Proceeds from the offer, which is underwritten by Macquarie Capital and Goldman Sachs Australia, will be used to repay existing corporate debt, strengthen its balance sheet and provide access to equity markets.

This will provide financial flexibility to pursue further growth opportunities.

Pepper was established in 2000 and commenced lending as a specialist residential mortgage lender in the Australian market in March 2001.

It offers lending products including residential mortgages, auto and equipment finance, point-of-sale finance and personal loans.

The company also provides loan servicing for its own products as well as for third parties across residential mortgages, consumer unsecured and secured loans and commercial real estate (CRE) backed loans.

The company will list 181.1 million shares at the offer price of $2.60, implying a market capitalisation of $471 million.

The company will trade as PEP on the Australian Securities Exchange.