Hirepool IPO to raise up to $262m

MICHAEL FOREMAN
Last updated 14:22 16/06/2014

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Equipment hire company Hirepool expects to begin trading on the New Zealand and Australian sharemarkets next month after it raises between $175 million and $262m from an initial public offering.

Hirepool's float will consist of institutional component and a broker firm offer for retail investors but there will be no public pool.

The final pricing of the offer will be determined by a bookbuild on June 24, but Hirepool said the indicative price range would be $1.10 to $1.50 a share, valuing the company at between $366m and $425m.

The capital raised will be used to pay down debt, buy shares in majority-owned subsidiary Bligh Finance, and allow some long-term existing shareholders to sell down shares, Hirepool said. Hirepool is majority-owned by Sydney-based private equity firm Next Capital and its co-investor Macquarie Group.

Next acquired Hirepool in 2006 in a $172m deal, and in 2012 the company bought competitor Hirequip when it went into receivership owing banks $117m. Next and its co-investors will own between 20 per cent to 35 per cent of the company's shares after the float, according to Hirepool.

Hirepool chief executive Brian Stephen said the equipment-hire market in New Zealand was highly fragmented and most of Hirepool's competitors were one-to-four-branch operations. The merger of Hirepool and Hirequip last year made Hirepool is the country's largest equipment-hire company with 58 branches across New Zealand.

Stephen said the company was now positioned to capitalise on growth in the economy and the increase in major infrastructure and construction projects across the country.

"While our underling revenue is aligned to GDP, project work provides the cream on the top," he said.

Hirepool's operating profit for this financial year was projected to be $46m, increasing to $60m in the 2015 financial year, according to its prospectus that was filed today.

Hirepool expects to begin trading on the NZX and ASX on July 11 with the ticker code HIR. 

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