PropertyGuru has pulled its proposed initial public offering, just two weeks after filing its IPO prospectus with the Australian Securities and Investment Commission.
The Southeast Asia property listings platform, which was seeking to raise up to A$380 million ($260 million) from the float, made a formal announcement today that it had withdrawn the IPO due to “uncertainty in the current IPO market”.
The 12-year-old company said that the decision had been made in agreement with existing shareholders, which include US private equity giants KKR and TPG. The withdrawal comes just over a week after KKR-backed Australian lender Latitude Financial aborted an ASX listing that was expected to raise A$1 billion.
“Despite strong engagement throughout the process with prospective investors, the board and existing shareholders have determined not to proceed with the offer,” PropertyGuru’s chairman Olivier Lim said, adding that the company’s decision “took into account current IPO market sentiment”.
Low End of Price Range Still Too High
The collapse of the planned share sale comes despite a Reuters report filed yesterday indicating that UBS and Credit Suisse had told investors in a book message on Tuesday that the institutional portion of the sale was oversubscribed.
The retail portion of the offering was due to have concluded yesterday, with the news account saying that PropertyGuru was offering it shares at the A$3.70 lower end of the range.
In PropertyGuru’s formal statement today, the company indicated that the offering, which was led by Credit Suisse and UBS, had received strong support from leading global and Australian investors.
The decision to call off the offering, which could have valued the media business at A$1.2 billion, is a major setback for the company, which had banked on using the potential A$380 million in proceeds to fund the company’s expansion into new territories and business segments.
It will also come as a blow to existing shareholders who, according to the prospectus lodged on 7 October, had intended to partially realise their investment.
KKR, TPG Said Sitting Tight
Despite the cancellation, the company said that it had the continued support of its existing shareholders, and confirmed that it had sufficient funds to continue its current operations.
“Should the Company seek new funds to support our identified growth opportunities, we have a committed existing shareholder base as well as access to private capital markets.”
In promoting the share offering, PropertyGuru had highlighted that KKR and TPG, which have an aggregate 58 percent stake in the business, were not looking to sell any shares at the IPO as proof of the company’s long-term robustness.
KKR owns a 28 percent interest in the property listings company after an investment of S$200 million in a funding round just twelve months ago while TPG, which owns a 31 percent of the company, led a 2015 funding round that raised S$175 million.
“Our team remains committed to pursuing our mission, given the size of the opportunity available to us, and our track record of sustainable and profitable growth,” said PropertyGuru’s chief executive officer Hari V Krishnan.
The company declined to comment in response to enquiries from Mingtiandi about the option of reviving the IPO at a later date.
11 Years of Expansion Fail to Reap a Profit
Operating its core business in Singapore, Vietnam, Thailand, Malaysia and Indonesia, the support of TPG and KKR has helped drive PropertyGuru’s transformation from a single-market start-up twelve years ago to an online classifieds giant with 23 million users monthly.
Currently commanding a 60 percent share of the online property listings market across the region, total property advertising across its core markets was worth S$949 million ($687 million) last year, with the company forecasting an increase to S$1.2 billion by 2023.
According to the 7 October IPO prospectus, 2018 marked the first year that the company had become both EBITDA and free cash flow positive.
The company’s revenue last year was S$55 million – S$34 million of which was from its Singapore business – while it incurred a full-year net loss after tax of S$3.8 million.