An engineering company that provides services to BHP and Rio Tinto is considering joining the ASX in a float that could value it at more than $400 million.
As the initial public offerings window opens offshore, Tasmea is out to prove the Australian listings market is open, and has kicked off meetings with potential investors in a bid to float as early as next month.
Tasmea makes about half of its revenue in Western Australia and servicing iron ore miners. Bloomberg
Tasmea was founded in 2007 and specialises in plant operations and maintenance, servicing miners and oil and gas groups predominantly in Western Australia and South Australia.
The Perth-based company has been a busy acquirer and is at the stage where it has 17 subsidiaries, 1300 employees and is big enough to potentially join Australia’s listed small caps index.
The group is run by founder, Stephen Young, the former managing partner of Arthur Anderson’s Adelaide office and a former member of Arthur Anderson’s worldwide advisory council. Mr Young also controls 48 per cent of the company’s shares through related parties.
Other major shareholders include Mark Vartuli, who also works with Mr Young at South Australian boutique advice shop Equity & Advisory, and owns a 21 per cent stake.
Tasmea has told potential investors it could report more than $400 million revenue and $60 million operating earnings this financial year, according to potential investors pitched the deal recently. It has hired stockbrokers Bell Potter and Shaw and Partners to find new investors.
Analysts reckon it could be worth $400 million to $500 million, based on the trading multiples of similar listed businesses.
It had $320 million revenue and $39.5 million in earnings before interest, tax, depreciation and amortisation in the year to June 30, according to accounts recently filed with the corporate regulator. About half of its revenue is leveraged to mining production (excluding coal), and its biggest market is iron miners in WA.
There was no mention of a potential IPO in its accounts for the last financial year, although shareholders were told the company was assessing a number of potential acquisitions. It acquired four businesses in that time.
Tasmea would be the second-biggest float on the ASX this year behind family-owned chemical distributor Redox should it garner sufficient investor support to push ahead with the IPO plans.
Its run at the ASX comes as a handful of other float candidates, including payments provider Cuscal and wealth platform owner Mason Stevens, prepare their own pitches to listed equities investors.
It would be a return to the ASX for Tasmea, albeit as a much larger entity and under a new name. The group was formerly listed as an investment vehicle called Equity & Advisory Ltd, with about $90 million turnover, but acquired WA’s Tasman Power in 2014 to shift towards essential shutdown and sustaining capital projects and significantly change its offering. It changed its name from E&A Ltd to Tasmea in March.
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