- Macquarie Group plans to price the initial public offering of software company Nuix this week.
- MQG's shareholding in Nuix is expected to reduce from 65 per cent to 30 per cent.
- Nuix is seeking to raise AUD 900 million to AUD 1 billion for its share market float.
- Shares are likely to be priced at between 8 and 11 times revenue to ensure the shares perform well on the listing.
Diversified financial group Macquarie Group Limited (ASX:MQG) is planning to price the initial public offering (IPO) of data analytics software company Nuix this week. The IPO will see Macquarie's shareholding in Nuix cutting down from 65 per cent to 30 per cent.
Nuix is reportedly seeking to raise AUD 900 million to AUD 1 billion, with at least half of Nuix expected to be on the offer. The initial public offering is anticipated to be the biggest in two years after Viva Energy's USD 1.9 billion IPO in 2018.
The bookbuild to set a price for the IPO is happening one week ahead of the schedule, on the back of increased risk appetite after the US election. Sources reveal that a wider group of institutional investors are expected at the auction next week.
Macquarie to Sell 25-35 per cent of shares
On Thursday, ahead of the auction, a prospectus covering details on the anticipated stake on offer and pricing, is expected to be shared with fund managers. MQG plans to sell its 25-35 per cent of its stake in the company. Additionally, other owner minority investors are planning to sell shares in the upcoming initial public offering.
Sources also informed that initially, Nuix and its bankers were reluctant to sell the shares. However, as they have now decided to go ahead with the IPO, shares are likely to be priced at between 8 and 11 times revenue, ensuring a robust performance on the listing.
At a price nine times of revenue, Nuix is expected to be valued at AUD 1.74 billion on the debut. This is likely to triple MQG's investment while providing a material boost to earnings for MQG's investment banking unit, Macquarie Capital.
Below is the snapshot of MQG’s financial performance in the half year ended 30 September 2020:
Image source: ASX announcement dated 6 November 2020
The consolidated net profit attributable to the ordinary equity holder stood at AUD 660 million in H1, representing a decline of 33 per cent from AUD 992 million in the year-ago period. Net operating income reached AUD 2,943 million, down by 14 per cent on PCP.
MQG traded at AUD 141.420, down by 0.437 per cent at AEST:12:42 PM on 12 November 2020.