WiseTech to Launch Largest Tech IPO Year-To-Date
WiseTech Global Limited is an Australian software company providing software solutions to the global logistics services industry.
The largest tech IPO and one of the biggest IPOs year-to-date is coming from Sydney based software company WiseTech Global Limited which is set to launch on the 11th of April 2016.
Richard White founded WiseTech in his basement in 1994 and could now realise a market capitalisation of more than $1billlion for his company. WiseTech Global Limited is an Australian software company providing software solutions to the global logistics services industry. WiseTech’s flagship product is CargoWise One, a software platform that facilitates the movement and storage of goods and information. WiseTech has 6,000 customers across more than 115 countries with offices in Australia, New Zealand, China, Singapore, South Africa, United Kingdom and Unites States.
WiseTech is raising capital to repay debt, enable existing shareholders to monetise on their investment and to achieve financial flexibility to support management’s growth strategy.
The price range for one WiseTech security is set at $2.58-$4.12 and the final price will be determined via bookbuild. WiseTech is expected to have a market capitalisation of at least $750million but could exceed $1billion, depending on demand and the final price for the IPO.
On paper WiseTech’s historical growth trajectory appears strong as revenue increased at an average annual rate of approximately 25% since FY13. In the same period net profit after tax (NPAT) has tripled and the company is generating free positive cashflow. Retention rates are high with recurring revenue representing more than 95% of total sales. Furthermore, management has a strong track record in the industry and aims to direct free cash flow as well as proceeds from the raising towards future growth initiatives.
The competitive industry and reliance on key customers are principal risks. WiseTech’s ten largest customers represent more than 20% of total revenue and any cancellations would adversely impact financial performance. Even though the valuation incorporates a degree of ongoing growth, overall the IPO offers and attractive mix of capital growth and income.
Company: WiseTech Global Limited
ASX Code: WTC
Shares on Offer: 24.3m-75m
Listing Price: $2.58-$4.12
Market Capitalisation: $762.9m-$1,190.7m
Listing Date: Apr 11
This publication has also appeared on The Australian
Author: Simon Herrmann
Apr 05, 2016
Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.