Vitaco IPO wins support
- BRIDGET CARTER & GRETCHEN FRIEMANN - THE AUSTRALIAN
- 12 AUG, 1:47 AM
Reporting season may have the attention of most fund managers, but that does not appear to be stopping some investment bankers from pressing on with IPO plans for their clients.
One in the pipeline is vitamin and supplements provider Vitaco, owned by Next Capital. The business has won over some prospective investors for its float plans, but as always a number are skittish about pricing expectations.
Vitaco recently took investors across the Tasman to explore its manufacturing operations, and while they were impressed they said their level of interest would boil down to the pricing of the deal.
JPMorgan and Citi are joint lead managers for the mooted IPO this year. Research from their analysts is circulating and their market valuation estimates for the company range between $277 million and $363m, equating to between 18 times and 24 times forecast net profit of $15.4m.
Citi analysts have the market value at between $277m and $323m, equating to a range of 18 to 21 times annual forecast net profit. JPMorgan has the market value at between $275m and $371m, implying a range of 18 to 24 times.
Vitaco, which has almost $40m of debt, wants to grow by tapping the Chinese export market for health supplements.
Its vitamins and supplements division makes most of its money selling through health food stores and pharmacies.
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