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A national property fund manager co-founded by Alan Bond's son is set to list on the ASX this Friday, following an oversubscribed $100 million initial public offering (IPO) from existing investors and institutions.
Perth-based Primewest, which has been in operation for 24 years and now has more than $3.9 billion in assets across 75 funds in seven asset classes, is expected to trade under the ticker PWG.
Founded by John Bond, Jim Litis and David Schwartz (pictured L-R), the company has successfully launched its IPO at a time when others like Latitude Financial Group haven't been able to pass muster.
Financial data and technology company Refinitiv recently released figures showing new IPOs had raised just $416 million in the first nine months of 2019, the lowest amount for the period since 2012.
Bond, who is Primewest's executive chairman, notes the oversubscription is encouraging in the current market and is testament to the group's track record of solid growth and innovation as well as its strong, credible reputation.
"Going public after 25 years will allow us to take this business to the next level and explore even greater opportunities in Australia and overseas," says Bond.
"With a solid business across all property sectors and all mainland states of Australia and a burgeoning business in the US, we will be primed to take advantage of opportunities wherever they occur.
Bond explains the funds raised in the IPO will mainly be used to establish a listed A-REIT, undertake corporate mergers and expand the company's wholesale mandate business. After the offer the group is expected to have approximately $80 million in working capital.
The listing values Primewest at $349 million on a market capitalisation basis and 18.4 times profit, based on pro forma 2020 financial year forecasts.
This means the issued shares, set to open at $1 each, represent 29 per cent stake in the company.
Potential investors were told to expect $35.6 million and $18.9 million pro forma net profit in the 2020 financial year.
After the offer, Bond is expected to hold a 20.8 per cent share of Primewest, followed by Litis (executive director) with 20.5 per cent and Schwartz (managing director) with 19.8 per cent.
The group currently has 31 staff across its Perth headquarters and Sydney office. Its portfolio is comprised of 39 per cent commercial, 24 per cent large format retail, 21 per cent convenience and 10 per cent industrial.
Almost 60 per cent of the value of Primewest's properties is in WA, followed by QLD (12.9 per cent), NSW (12.8 per cent), VIC & TAS (9.4 per cent), SA (3.2 per cent) and California (2.4 per cent).
The company's most valuable property is Exchange Tower in the Perth CBD at $320 million, while other major assets include 1 William Street (Perth), Primewest Auburn (Sydney) and Australia Place (Perth). These properties combined make up for almost a fifth of Primewest's portfolio.
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