Australia's largest poultry producer Inghams Group will list on the ASX next month with an equity value of up to $1.5 billion, putting it on course to be the country's largest initial public offering this year.
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US private equity giant TPG Capital Management will sell between 50 per cent and 70 per cent of the firm in the IPO, at an indicative price range of $3.57 to $4.14 a share.
The range values Ingham's at 13.5 to 15.5 times its pro forma 2017 net profit, while the offer includes the sale of up to 45.2 million new shares to raise up to $172 million.
At the high end of guidance, the partial sale of existing shares would fetch about $950 million, after TPG bought the firm in 2013 for about $880 million. The private equiteers would still retain a 27 per cent stake in the company.
The listing would be a bright spot in what has been a subdued market for Australian IPOs amid volatile share trading.
TPG Capital also plans to sell energy company Alinta this year, according to media reports.
Australia exports only a small percentage of chicken and turkey each year, but Ingham's has seen strong growth in domestic consumption, pushing the company to record profits this year.
Chicken consumption has grown 4.1 percent a year between 1990 and 2015, Ingham's said, primarily due to consumer preferences for food seen as healthier.
The outlook for poultry has also been strengthened by tightening supplies of beef after a drought in the country's prime grazing region trimmed the size of its cattle herd to at least a 20-year low, stoking record prices for the red meat.
Australia's strict biosecurity laws also make it difficult to import poultry, leaving Ingham's in a strong position.
Reuters
