Australia's Anchorage plots big win IPO

The turnaround-focused firm will partially exit retailer Dick Smith in an A$344m IPO a year after it was acquired for A$20 million.

Sydney-based Anchorage Capital Partners-backed Dick Smith, an electronics retailer, has lodged the prospectus for its planned initial public offering on the ASX with the Australia Securities and Investments Commission, according to a company statement. The offering will open on 21 November for institutional investors and a day later for retail investors.

The total IPO is expected to raise A$344.5 million (€239 million; $321 million), with shares priced at $2.20 per share, according to the firm.

Following the deal, Anchorage will still own 20 percent of the business and remain the largest single shareholder, according to the IPO prospectus. Total payment to Anchorage will be A$358.1 million, which includes proceeds of the offer, statutory cash and a drawdown of the new facility.

The turnaround and special situations firm acquired Dick Smith from Woolworths for just A$20 million in September last year, after an eight-month search for a buyer, media reports said earlier.

Now, Dick Smith is one of the largest retailers of consumer electronics products in Australia and New Zealand, with the largest consumer electronics store network, according to the firm.

“The purposes of the offer include providing Anchorage an opportunity to realise part of its investment in Dick Smith now that major transformation initiatives have been implemented, given that Anchorage is a turnaround-focused private equity firm,” a Dick Smith statement said.

“Dick Smith has undergone a significant transformation under the dynamic ownership of Anchorage. With the transformation initiatives largely implemented, management put in place a comprehensive strategy and plan focusing on key business initiatives which provide a strong platform for growth and the further development of our business,” Nick Abboud, managing director and chief executive of Dick Smith, added in the statement.

Australia’s capital markets have been buoyant recently, providing exit opportunities for private equity firms.

In early November, Apollo Global Management and Oaktree Capital Management released a prospectus for the IPO of Australian TV network Nine Entertainment, of which they won control from CVC Capital Partners last year in a $3.4 billion debt-for-equity swap, Private Equity International reported earlier.

The total offer on the ASX could be worth up to A$670 million, with a price range of between A$2.05 and A$2.35 per share. 

In April, Anchorage made an A$250 million final close on its second fund, Anchorage Capital Partners II, PEI reported earlier.

Sydney-based Anchorage Capital Partners was established in 2007 as a continuation of the former Minstar Capital. The firm focuses on special situations and turnaround opportunities. It typically invests in well-established industries that are not involved in high technology.