Changes are happening - please bear with us while we update our site.

Changes are happening - please bear with us while we update our site.

Link (ASX:LNK) lodges prospectus for PEXA listing

Link Administration Holdings (ASX: LNK) has lodged the prospectus for the initial public offering (IPO) of PEXA Group Limited.

Link Administration Holdings Ltd (ASX: LNK) has lodged the prospectus for the initial public offering (IPO) of PEXA Group Limited. The prospectus is now available at the following link.

PEXA operates Australia’s leading digital property settlements platform with over 80% market share. The company is looking to explore opportunities abroad beginning with the United Kingdom – a market 2.5x Australia.

Shares in Link remain unchanged today at a share price of $4.93.

PEXA listing details revealed

The new company will trade under PEXA Group Limited with the ASX ticker code PXA. Subject to satisfying admission requirements, PEXA will begin trading on 1 July 2021.

PEXA will start trading at a price of $17.13 per share after raising $1.175 billion in the IPO.

Link will retain a 47% shareholding in PEXA and receive a minimum of $50 million of cash proceeds. Depending on the demand for shares in the IPO, Link’s holding may be scaled back below 47%.

PEXA has been valued at an enterprise value of $3.31 billion, therefore, valuing Link’s 47% shareholding at $1.55 billion.

For context, Link has a current market capitalisation of $2.64 billion. As a result, PEXA will account on a look-through basis for 60% of Link’s market cap.

Link Group’s CEO & Managing Director, Vivek Bhatia, said

“PEXA continues to lead the transformation of digital property settlement in Australia and now processes more than 80% of property transfers nationally through its platform. Its success in Australia supports strong cash flows as well as further growth opportunities through valuable data-driven insights for property market participants in Australia and the potential to replicate its property lodgement and settlement platform internationally, starting with the United Kingdom.

My take

The enterprise value of $3.3 billion values PEXA 70% above what private equity outfit KKR was willing to acquire PEXA for. Consequently, this validates management and the board’s decision to IPO PEXA rather than sell the business in its entirety.

The free float of shares remains relatively low, given Link will retain up to 47% shareholding and the Commonwealth Bank of Australia (ASX: CBA), has increased its shareholding up to 29%. PEXA is richly valued at 13.4x revenue (FY22) and 30.8x EBITDA (FY22). Nonetheless, investors have been queuing up to grab a slice of the largest IPO in 2021 to date.

I’ll be taking a closer look at the prospectus to gain a better understanding of PEXA and its growth opportunity.

For more share ideas, check out 3 ASX shares to add to your watchlist this week.

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned.
Skip to content