Latitude Financial Seeks to Raise Up to $945 Million in Australian IPO
September 26 2019 - 12:56AM
Dow Jones News
By Robb M. Stewart
MELBOURNE, Australia--A consortium of investors including KKR
& Co. have launched an initial public offering for Australian
digital payments and lending platform Latitude Financial that could
raise as much as 1.4 billion Australian dollars (US$945.1
million).
The planned float comes as Australia's incumbent
financial-services providers face fresh competition in the wake of
a damning year-long government ordered probe into misconduct, with
the launch of several new digital-only banks, the rise of payment
companies and "buy-now pay-later" services.
Latitude will offer more than 620 million new shares at between
A$2 and A$2.25 each, raising A$1.24 billion-A$1.4 billion,
according to the prospectus for the offer released Thursday. That
would give Latitude a market value of between A$3.56 billion and
A$4 billion.
Owners KKR, Varde Partners and Deutsche Bank AG are expected to
retain an about 54% collective stake in the company and have agreed
to hold on to their shares until at least a couple of days after
Latitude releases its financial results for the year through June
2020.
In a letter accompanying the prospectus, Chairman Michael Tilley
said the listing on the Australian Securities exchange would boost
Latitude's financial flexibility and help its growth strategy.
About 70% of the IPO proceeds will be used to repay shareholder
loans and 20% would be paid to the selling investors, the offer
document said.
Melbourne-headquartered Latitude had gross loan receivables of
A$7.7 billion as of end-June and has forecast 8.4% growth in its
pro forma net profit to A$178.2 million in fiscal 2020, as
net-interest income rises an estimated 3.2% to A$984.4 million.
The offer is being arranged and managed by Goldman Sachs Group
Inc., Macquarie Capital and UBS Group AG. The shares will be
offered to Australian and New Zealand clients of brokerages that
are allocated stock, and through an institutional offer to
professional investors. The final price for the offer is scheduled
to be determined in mid-October and initial trading is set for Oct.
18.
With the float, stakes of 35% held by KKR and Varde will drop to
just under 21% each, and Deutsche Bank's 30% holding will narrow to
almost 13%.
Latitude said it has about 2.6 million customer accounts and
1,950 merchants across Australia and New Zealand, including
electronics retailers Apple Inc. and JB Hi-Fi Ltd. The business was
bought from General Electric Co. by KKR and its partners in
2015.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
September 26, 2019 00:41 ET (04:41 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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