Latitude Financial lodges prospectus ahead of ASX listing
Instalments and lending business Latitude Financial has lodged a prospectus with the Australian Securities and Investments Commission ahead of a proposed listing on the Australian Securities Exchange (ASX) in April.
Under the prospectus, Latitude’s existing owners, KKR, Värde Partners and Deutsche Bank, will indirectly offer a portion of their shares to investors at $2.60 each. There will be one billion shares on issue, valuing Latitude at $2.6 billion at the completion of the offer. KKR, Värde Partners and Deutsche Bank (via their holding company KVDS) will retain 66.4% of Latitude shares after listing, with their shares subject to escrow. There will be approximately $860 million of free float at the IPO price.
Latitude has secured $479 million of commitments from strategic, institutional and retail investors ahead of the prospectus lodgement. Japan-based Shinsei Bank has agreed to purchase a 10% stake, comprising a 9.95% upfront investment, with the remaining 0.05% stake subject to FIRB approval.
The prospectus contains detailed information about the offer, Latitude’s financial and operating performance, outlook and material risks associated with the business and the industry in which it operates. The prospectus highlights Latitude’s operational scale, profitability and growth plans.
The offer comprises an institutional offer, a broker firm and employee offer. The offer of $200 million is fully underwritten by the Joint Lead Managers, BofA Securities, Credit Suisse and Jefferies (other than the employee offer). The broker firm and employee offer is scheduled to open on Monday, 12 April 2021 and close on Friday,16 April 2021. No general public offer of shares will be made under the offer.
It is anticipated the shares will start trading on the ASX in the week commencing Monday, 19 April 2021.
Latitude Chairman Mike Tilley said: “Listing on the ASX will provide Latitude with access to public equity capital markets and greater financial flexibility as it pursues further growth opportunities. Following completion, the existing owners remain committed to Latitude and are expected to hold approximately 66% of the issued shares,” he said.
Latitude Managing Director and Chief Executive Officer Ahmed Fahour said: “The decision by Latitude’s owners to seek to list on the ASX is a significant milestone for the company, including our employees, business partners and customers.”
“Latitude is a highly profitable business, with more than 2.77 million customer accounts and a focus on interest free instalments and lending. The business has significant opportunities to work with our partners to expand further in our Australia and New Zealand domestic markets and offshore. We also continue to invest in technology as we shift to a lower-cost digital platform model,” he said.
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The Offer for Shares in Latitude Group Holdings Limited (Company) is being made by Latitude SaleCo Limited pursuant to the Prospectus lodged with Australian Securities and Investments Commission (ASIC) on 30 March 2021. A person considering whether to acquire Shares under the Offer should read the Prospectus carefully and in its entirety, including the terms of the Offer and the risk factors involved in investing in the Company before deciding whether to apply for Shares. Applicants for Shares will need to complete the application form that will be in or will be accompanying the Prospectus. An electronic form of the Prospectus can be viewed or downloaded online at www.latitudeipo.com.au but applications can only be made by persons invited to apply.
Latitude is a leading Instalments and Lending business, with 2.77 million customer accounts and more than 3,400 merchant partners (with over 10,600 outlets) in Australia and New Zealand.
Latitude’s merchant partners include major retailers across a wide range of living and lifestyle goods, including Apple, Harvey Norman, The Good Guys, JB Hi‑Fi, Samsung and Luxury Escapes, providing Latitude with significant scale and distribution for its products. Latitude’s lending products are also distributed by a network of over 5,800 accredited brokers in Australia and the Kiwibank’s branch network in New Zealand.
Headquartered in Melbourne, Australia, Latitude employs approximately 1500 FTE staff. In 2015, a consortium of investors consisting of KKR, Värde Partners and Deutsche Bank acquired the business from GE.
Latitude has since established itself as a disruptor in payments and lending, combining the risk management processes and long‑standing customer relationships fostered under its GE heritage with substantial investment to create a unified brand and experience for its partners and customers, with upgraded technology, an established funding platform and ongoing customer innovation.