Dick Smith IPO launch aims for $344.5 million

Dick Smith has lodged its much anticipated prospectus with the Australian Securities and Investments Commission, seeking to raise $344.5 million via the public offering of 157 million shares.

Speculation over the value of the initial public offer has been rife in recent months, and at one stage it was predicted it could be worth up to $600 million.

The figure of $344.5 million is based on the price of $2.20 a share, and is still a substantial increase on what Anchorage Capital Partners paid for the electronics business last September. The turnaround and private equity firm handed over just $20 million to former owner Woolworths for the chain.

At the time, there was an agreement that Woolworths would collect a proportion of the sale price when Anchorage sold Dick Smith. However, Anchorage paid another $74 million to Woolworths earlier this year to get out of that agreement.

Anchorage will retain a 20% interest in the business. The management team will retain all of their existing equity stakes on listing, so they will collectively hold approximately 11.5% of the shares on issue.

Dick Smith managing director and chief executive Nick Abboud said in a statement that the business had undergone “significant transformation” over the past year under Anchorage.

“With the transformation initiatives largely implemented, management put in place a comprehensive strategy and plan focusing on key business initiatives which provide a strong platform for growth and the further development of our business,” he said.

Anchorage are promoting the brand’s iconic status, high growth product offer and solid quarter one 2014 financial results to appeal to potential shareholders.

It predicts that EBITDA is forecast to grow to $71.8 million in financial year 2014 from $23.4 million in FY2013.

The IPO is expected to be completed before Christmas.

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