AFG valued ahead of IPO

Major mortgage aggregator AFG has revealed its market valuation ahead of listing on the ASX later this month.

Earlier today the group lodged a prospectus with ASIC for an initial public offer (IPO) and listing on the ASX. AFG was given an indicative market cap of $257.8 million and $296.4 million.

The AFG loan book currently sits at more than $100 billion, the largest Australian loan book outside the major banks, according to the group.

The IPO is expected to raise between $121.3 million and $140.1 million, based on an indicative price range of $1.20 to $1.38 per share. Based on the mid-point of this range, $1.29 per share, approximately $35 million will be raised by the issue of new shares by AFG (before costs) and approximately $95.9 million will be raised by the sale of shares by existing shareholders.

Macquarie Capital is the lead manager and Morgans Corporate Limited is the co-manager to the IPO.

AFG co-founder and managing director Brett McKeon said funds raised in the IPO would be used to purchase the equity of certain existing shareholders and to provide funding for operations and growth.

Existing shareholders will continue to own approximately 52.7 per cent of AFG, with shares owned by the co-founders and certain other existing shareholders escrowed until the release of the company’s FY2016 results, he said.

“We have received a number of offers for the company since we started operations more than 20 years ago, but we believe listing on the ASX is the best avenue to ensure AFG’s sustainable growth and to retain and attract brokers to our network,” Mr McKeon said.

“We are a significant player in a growing market and we are confident of delivering long-term returns to shareholders.

“We have shown a consistent ability to generate profits through the residential property cycle and with almost 50 per cent of our revenues being generated through trail commission on the existing AFG Loan Book, we believe we have an attractive mix of recurrent earnings and growth.”

Mr McKeon will remain as managing director of AFG upon listing on the ASX. Co-founder Malcolm Watkins also remains on the board in an executive function, with Kevin Matthews as a non-executive director.

Tony Gill will remain as independent non-executive chairman, with independent non-executive directors John Atkins, Jim Minto and Craig Carter completing the board.

AFG shares are currently expected to begin trading on the ASX on a deferred settlement basis on or around 22 May 2015, under the ticker code ‘AFG’.

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