A wave of Initial Public Offerings, or IPOs as they are more commonly called, is about to hit the ASX, with several companies taking advantage of rising equity markets to list on the Stock Exchange.
Here’s three that may be interesting.
Veda, a credit reporting and data business, is due to re-list on the ASX, possibly by the end of this year. Veda was taken private in 2007, in a deal that was worth $974 million. The float could raise around $1.5 billion, giving its private equity owner, Pacific Equity Partners (PEP), a healthy return, if the deal is priced similar to Iress (ASX: IRE). With private equity listings on the nose, PEP is expected to remain fully invested in the IPO. PEP is reported to expect Veda’s revenues to grow substantially over the next few years, as demand for its products and services rises. The Australian Financial Review reports that banks and other credit providers will be able to search Veda’s database to find customers with good credit histories to target with offers, rather than just avoiding those with bad credit.
Travel business, Sealink Travel Group, is expected to raise $15 million and list on the ASX in October (ASX code is expected to be SKL). Sealink operates several ferry services in South Australia, Queensland and the Northern Territory, Sydney’s Captain Cook Cruises as well as travel agencies, coach tours, package holidays and accommodation services on Kangaroo Island. The company expects to carry more than 2 million passengers on its 18 vessels this year, generating a profit of around $7 million. Shares are being offered at $1.10 each, and those investors interested can view the prospectus here. Given the performance of travel related stocks Flight Centre (ASX: FLT) and Corporate Travel Management (ASX: CTD), Sealink could be worth a look.
Another interesting IPO could be Freelancer.com. Founder and chief executive Matt Barrie recently rejected a US$400 million offer for the company, choosing instead to list his company on the ASX. Freelancer.com is one of the world’s largest outsourcing marketplaces, matching users and projects with freelancers bidding to carry out the work. Freelancer.com then takes a cut on all the jobs listed. With more than 8 million users and more than 4 million projects posted, Freelancer.com could be one to watch.
Investing in IPOs can be a dangerous business – just look at the 19% share price fall iSelect (ASX: ISU) has experienced since listing in June. Foolish investors are advised to tread carefully.
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Motley Fool writer/analyst Mike King owns shares in Flight Centre.