Sponsor brokers Citigroup and Goldman Sachs have about ten days to get fund managers up to speed on debtor and trade finance company Scottish Pacific.
Street Talk understands a management roadshow for the float is due to kick off on June 6, and span Australia, New Zealand, Asia and potentially the United Kingdom.
The next few weeks will be a crucial time for the offer, particularly as fund managers are still taking a highly selective and cautious approach on on initial public offerings.
Its sponsor brokers Citigroup and Goldman Sachs started marketing with pre-deal marketing research on Thursday. As Street Talk revealed, Citi placed an equity value of $455 million to $563 million on Scottish Pacific in research sent to fund managers.
The valuation is based on a multiple of 14.5-17.9 times the debtor and trade finance company’s financial year 2017 net profit after tax and amortisation.
Scottish Pacific is forecasting net revenue growth of 17 per cent to $109 million. Citi said the company’s growth drivers included increasing market penetration, product development and operating leverage.
Goldman Sachs applied a slightly more conservative equity value of $419 million to $512 million. That range was based on a multiple of 13.3-16.3 times 2017 NPATA.
Goldman noted Scottish Pacific was a top three provider of debtor finance to small and medium companies with about 20 per cent market share. Debtor finance is used to bridge the gap between the provision of goods and services and receiving the funds from customers.
Fundies are being told to not only compare Scottish Pacific to listed leasing companies such as Eclipx Group and sgfleet, but also to stocks that have defensive earnings and a strong market position among small-to-medium enterprise clients.
Those include MYOB, foreign exchange group OFX and insurance broking company Austbrokers Holdings.
Analysts are also highlighting Scottish Pacific’s stable management team and the company’s scale following the acquisition of rival firm Bibby Australia and buying books from Suncorp and GE.
While mid-market private equity firm Next Capital is set to pare its stake as part of the initial public offering, founding partner Patrick Elliott is slated to be chairman of the listed entity.
He will be joined on the board by Scottish Pacific chief executive Peter Langham and existing non-executive director and former Westpac Banking Corp executive, Peter Clare.
Published in AFR