The Link Administration Holdings Ltd (ASX: LNK) share price is on the move this morning. This comes after the company provided an update on its Property Exchange Australia (PEXA) business.
After touching an intraday high of $5.00 in early morning trading, the Link share price has slipped and is now hovering around its previous closing price of $4.93. In comparison, the S&P/ASX 200 Index (ASX: XJO) is up 1% to 7,386 points.
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What did Link announce?
Investors are pushing the Link share price into negative territory today after the company's news regarding PEXA.
According to Link's statement, PEXA has lodged a prospectus for its upcoming initial public offering (IPO).
This follows a completed cornerstone bookbuild process and signed underwriting agreement by Link at the end of last month.
The enterprise value of the IPO is around $3.3 billion, with Link's carrying value at around $1.6 billion.
Link owns a 44.18% interest in Torrens Group Holdings Pty Ltd which is the holding company for PEXA. However, prior to any scale back from this process, Link's shareholding in PEXA will lift to about 47%.
Link will receive a minimum of $50 million in cash proceeds as a result of the IPO, as well as any proceeds from the scale back.
The proposed listing date on the ASX for PEXA is 1 July 2021, provided all ASX admission requirements are met.
Management commentary
Link Group CEO and managing director Vivek Bhatia said:
PEXA continues to lead the transformation of digital property settlement in Australia and now processes more than 80% of property transfers nationally through its platform.
Its success in Australia supports strong cash flows as well as further growth opportunities through valuable data-driven insights for property market participants in Australia and the potential to replicate its property lodgement and settlement platform internationally, starting with the United Kingdom.
PEXA is a digital platform that enables settlement for real estate assets. Conveyancers, lawyers and financial institutions are able to complete financial transactions within minutes online, as compared to traditional methods.
The advantages of the platform are reduced time and costs in the property exchange process including funds being transferred electronically as opposed to cheques.
The Link share price has gained approximately 12% from this time last year, but is down 11% in 2021.
