Liberty Financial fronts funds for $1.8b float
Look what the cat dragged in!
After more than 15 years in the initial public offering pipeline - and with the market trading at 20-times forward profit and float window wide open - Sherman Ma wants to see his non-bank lender Liberty Financial on the ASX-boards.
Sherman Ma. Jessica Shapiro
Ma will have Liberty's broker Credit Suisse pitching the story to fund managers in coming days, before his chief executive James Boyle and chief financial officer Peter Riedel also get out and spread the good word.
Liberty is expected to be pitched as a big, profitable player in Australia's financial services sector. It was one of the first non-bank lenders in the country and now has assets worth $13 billion across its various products - home loans, car loans, personal loans etc.
Investors are expected to be told about the group's growth over the past decade - 19 per cent on a compound annual growth rate basis - and little impact from the recent economic downturn.
Ma and a handful of secretive backers, who together own 100 per cent of Liberty, are expected to seek to list about a 20 per cent stake, and commit to remain heavily involved post the mooted float.
Liberty made $134.7 million profit in the year to June 30, according to accounts filed with the corporate regulator, on $852.3 million operating revenue. The numbers were up from $89 million and $811.4 million one year earlier.
Assuming the growth continues into the 2021 financial year, Liberty would come to market with expectations of $160 million to $170 million cash net profit after tax.
Ma and his bankers are expected to ask investors to compare Liberty to the banks - and value it accordingly.
Australia's banks are trading at 15.9 times 2021 forecast profit, according to Credit Suisse numbers published last Thursday, and 14.2 times forecast earnings.
At 13-times profit, which about where ANZ and Westpac's shares are trading, Liberty would be worth just north of $2 billion.
At 12-times it would be nudging $2 billion.
The marketing comes only three weeks after Street Talk reported Liberty had called in Credit Suisse and KPMG to get cracking on the numbers. (PwC Legal is also working on the prospectus, while Shaw and Partners and E&P are co-managers to the proposed raising).
Liberty has since filed accounts for the 2020 financial year, which were signed by executive director Ma and auditor KPMG. Former Lendlease and Boral director Richard Longes is Liberty chairman.
Liberty's run at the ASX boards come after a few attempts over the years. The Australian Financial Review was writing stories about a potential IPO as far back at 2004, when it was dubbed a "non-conforming" lender, was advised by Goldman Sachs JBWere and was part owned by Macquarie.
Liberty's expected to seek funds to lock in early backers for the float in the coming fortnight and list in December.
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