Turning tides:
Australian ECM Review 2023
13 3月 2024
Insight
Australia
Our annual Australian ECM review was released on 23 February and covers significant developments in Australian capital markets, with several chapters providing useful information for private equity clients.
The highlights
1. Block Trades completing the picture of successful PE exits
In 2023 Private Equity firms capitalised on post-float block trades, exemplified by the successful sell down of Apollo Funds’ and CIMIC’s ~65% retained holding in Ventia Services Group following its IPO in 2021.
It is well known that IPOs involving Private Equity vendors generally involve escrow arrangements that result in a partial exit on IPO. However, what is not generally appreciated is the opportunity to realise value in post-IPO sell-downs and our analysis showed that greater overall value has been recognised through post-IPO block trades as Private Equity vendors have in a large part managed to calibrate their later sell-downs through block trades at prices above the IPO price.
2. Alternate approaches to listing – Chemist Warehouse’s reverse takeover of Sigma
HSF is advising on Chemist Warehouse’s proposed reverse takeover of Sigma Healthcare, which will see Chemist Warehouse come to the ASX as one of Australia’s largest private companies. The transaction structure enabled a merger with Sigma, unlocking significant synergies and also meant that Chemist Warehouse was not required to comply with ASX’s admission requirements. With IPO markets being muted in 2023, the overwhelming positive response to the Chemist Warehouse / Sigma transaction indicates that the market is nonetheless enthusiastic for high quality listings.
3. 2023 activity
2023 saw fewer listings, but with higher market capitalisation of those that did list as compared with the previous year. The standout listing for 2023 was the IPO of Redox – the largest listing since November 2021 and the largest IPO in 2023 by some margin. Herbert Smith Freehills acted on the listing of Redox
4. 2024 Predictions
Despite economic and geo-political headwinds, green shoots have emerged in late 2023 and early 2024. In 2024, we expect pent-up supply from vendors and founders, matched by pent-up demand from investors seeking new opportunities, to drive capital markets activity. If inflation and interest rate cycles continue to ease, we expect a window for IPOs will likely open between September and November
Key contacts
Chapters
- Turning tides: The Australian ECM Review 2023
- Key US securities developments
- 2024 predictions
- 2023 IPOs by the numbers
- Alchemy on the ASX: Unorthodox paths to ASX success
- 2023 secondary raisings by the numbers
- Block trades: Risk and opportunities
- Regulatory developments
- 2023 key themes
- Resources deals
- A Private Equity Perspective
Legal Notice
The contents of this publication are for reference purposes only and may not be current as at the date of accessing this publication. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication.
© Herbert Smith Freehills 2024
Stay in the know
We’ll send you the latest insights and briefings tailored to your needs