Family-owned big business out to break ASX exodus with $1.4b float

  • 📰 FinancialReview
  • ⏱ Reading Time:
  • 85 sec. here
  • 3 min. at publisher
  • 📊 Quality Score:
  • News: 37%
  • Publisher: 90%

Business News News

Business Business Latest News,Business Business Headlines

Redox, an unheralded chemicals importer from south-west Sydney, is fronting investors for a $1.4 billion-odd float that would see it join Australia’s top 300 stocks and lock in a big paper valuation for its family shareholders.

It’s been one-way traffic off the ASX since the start of last year, with takeovers outpacing initial public offerings by a factor of more than 50-to-one.

Redox, an unheralded chemicals importer from south-west Sydney, is out to stop the one-way traffic. It is fronting investors for a $1.4 billion-odd float that would see it join Australia’s top 300 stocks and lock in a big paper valuation for its family shareholders. It would also put an end to the one-way ASX-exodus following the loss of Sydney Airport, AusNet, Crown Resorts, CIMIC, OZ Minerals, Tassal, Virtus Health, Nitro Software and Senex Energy among others.

IPOs have also been out of favour; only one company, Chrysos Corporation, has raised more than $100 million to list on the ASX since January 2022So Redox is trying to break the drought. The company, pronounced red-ox, is exactly the sort of business that should be able to stop the exodus given its roots, track record and “defensive growth” pitch.

The business should – if history is any guide – be pretty bombproof, at least in the forecast period. Its pathfinder prospectus forecasts $1.24 billion pro forma revenue and $81.3 million net profit after tax for the nearly completed financial year, increasing to $1.33 billion and $97.4 million next year. The numbers make it clear Redox performed well through the COVID-19 pandemic and after.

Pricing discussions with potential cornerstone investors are heating up this week, and seem to be focused at around 14-times profit on a price-to-earnings basis. Fourteen-times the 2024 financial year net profit forecast would imply about a $1.4 billion market capitalisation, and if the Coneliano’s sold a 30 per cent stake at that price, it would imply about a $420 million IPO. [The family shareholders would retain the rest].It was also 10 times to 14.

 

Thank you for your comment. Your comment will be published after being reviewed.
Please try again later.
We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

 /  🏆 2. in BUSİNESS

Business Business Latest News, Business Business Headlines