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Ventia Services Group ltd (VNT) has had its initial public offering had been considerably downsized and repriced to ensure it hit the ASX boards as scheduled this week.

Ventia owners, ASX listed CIMIC and private equity firm Apollo Global Management, saw the company raise $438 million and its two big shareholders retain almost all of their shares at the float.

The IPO is at $1.70 a share and values the group at $1.5 billion on a market capitalisation basis or 8.5 times forecast net profit after tax and amortisation for the 2022 calendar year. It would imply an 8.9 per cent dividend yield.

Listing date 19 November 2021 ; 1:00 PM AEDT ##
Company contact details https://www.ventia.com/
Principal Activities Ventia is one of the largest essential services providers in Australia and New Zealand. Ventia was created in 2015 following the merger of Leighton Contractors Services division, Thiess Services and Visionstream. In 2020, Ventia acquired Broadspectrum (formerly Transfield Services).
GICS industry group TBA
Issue Price AUD 1.70
Issue Type Ordinary Fully Paid Shares
Security code VNT
Capital to be Raised $438,000,000
Expected offer close date 10 November 2021

Not underwritten. Barrenjoey Advisory Pty Limited, J.P. Morgan Securities Australia Limited and Macquarie Capital (Australia) Limited (Joint Lead Managers)

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and opened at $2.08; trading as high as $2.14 on Day One.


While CIMIC and Apollo would be disappointed to reprice the deal, they cut the raising size and price to ensure the company gets listed. They are each expected to own close to 35 per cent of the listed Ventia, held under escrow, and will hope the new structure means it will trade strongly in the secondary market..

... but expect a bit of volatility as only 30% is free float (and eligible for index inclusion).


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given the repricing of this IPO to get it away, there is a remarkable consistency in pricing in the 4 days on market ... trading in a range of just a few cents, from $2.08 to $2.14.

The *indicative pricing* prior to IPO when first mooted was from $2.75 to $3.15; the IPO got away at $1.70.

CIMIC and US private equity firm Apollo Global Management , which previously each held 47 per cent , had intended to sell most of their holdings and retain only 22.3 per cent each. CIMIC and Apollo ended up retaining bigger stakes than forecast, some 280 million shares each, or equal stakes of 32.8 per cent. (= 65.6%).

Institutions were nervous about the amount of stock CIMIC and Apollo were trying to offload, while others were reluctant to invest in a contracting business (which can report hefty write-downs when contracts go wrong.) Other investors were wary of buying shares in an entity partially owned by CIMIC which has a poor record on transparency (!)

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