The private equity owner of Loscam, an Australian-based supplier of pallets, has appointed banking advisers to assist with a stock market listing that could raise A$800m ($720m).
An initial public offering, expected within three months, will be an important test of investor appetite following a series of recent disappointing IPOs in Australia.
Loscam is owned by Affinity Equity Partners, an Asia-focused private equity group, which acquired it in 2005. According to people familiar with the matter, Affinity has hired Credit Suisse and Deutsche Bank to help with the IPO.
Loscam has a market share in Australia of about 25 per cent – compared with the 75 per cent share held by Chep, a subsidiary of Brambles.
But Loscam claims to have a superior presence in fast-growing Asian markets including China, Indonesia and Malaysia.
“This is primarily an Asian growth story as opposed to a domestic one,” said a person familiar with the matter. “Also, this is not in the retail sector.”
Several private equity and industrial groups are considering bidding for the company and there is a small chance that the IPO process could be shelved in favour of a private sale, according to people familiar with the situation.
Affinity is the controlling shareholder, but Loscam senior managers own 23 per cent of the company and an IPO would provide a more liquid currency for their holdings.
The private equity group, which was set up in 2004 and manages funds and assets in excess of $4bn, has led a number of buy-outs in South Korea, China, Singapore and Australia.
Affinity, Credit Suisse and Deutsche Bank declined to comment.
Cash-rich Australian institutions remain nervous about the local IPO market given that two recent high-profile listings – Myer Holdings, a department store chain, and Kathmandu Holdings, a camping and outdoor clothing chain – are trading below their issue price.