I've heard this IPO led by Credit Suisse and Morgans is in very high demand and will be difficult securing a good allocation. Similar to Boral that is trading near all time highs.
Terms out for Wagners initial public offering
IPO hopeful Wagners Holdings is seeking to raise up to $196.8 million in a deal that would value the diversified construction materials company at $437.3 million.
Joint lead managers Credit Suisse and Morgans sent terms to fund managers on Monday, outlaying Wagners' efforts to list on the ASX boards.
The offer has been priced at between $2.63 and $2.71, which represents 18.42 times to 18.85 times forecast net profit. The exact price will be set at an institutional bookbuild on November 17.
If successful, Wagners will start trading on December 18.
The founding Wagner family is keeping plenty of skin in the game. The term sheet shows it will retain almost 90 million shares, or 55 per cent of the group after its listing. And the stake will be held in escrow until after the 2019 financial year results, giving investors further confidence there will be no quick exit.
The IPO launch comes after Credit Suisse valued Wagners' equity at as much as $437 million in pre-marketing research sent to fund managers last Monday ahead of this week's management roadshow.
The Swiss bank's equity valuation range of $353 million to $437 million equates to 15.2 times to 18.7 times forecast net profit or 8.3 times to 9.9 times on an enterprise value/earnings before interest, tax, depreciation and amortisation basis.
Meanwhile, analysts at Brisbane-based stockbroking and advisory firm Morgans set a $472 million to $512 million equity valuation range on the company.
Wagners was founded in 1989 in Toowoomba, Queensland by Henry, John, Denis, Neill, and Joe Wagner.
The company, which also owns Brisbane West Wellcamp Airport and Wellcamp Business Park, started with three trading divisions - Wagners Concrete, Quarries and Transport.
It has since expanded into cement, flyash and lime, reinforcing steel, on site concrete supply, contract crushing and bulk transport, as well as lightweight composite fibre products.
IPO proceeds will be used to pay down debt.
