Back to the future: Trade Me’s owner lining up $3 billion listing

Trade Me could be returning to the NZX after a three-year absence.

The company’s current owner, British private equity firm Apax Partners, is considering a $3 billion-plus float next year, via an ASX-NZX dual listing, according to a report in The Australian.

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Lance Wiggs, who acted as an advisor to Sam Morgan on Trade Me’s $700 million sale to Fairfax, told the Herald this morning, “While the ownership of Trade Me might change over time, the company has generated billions in value for traders, the various shareholders and, through reuse of goods, the economy and the environment.”

Wiggs added, “The acquisition by Apax was almost perfectly timed to be impacted by the pandemic, but they may have used that to reduce costs and improve ebidta. That, and frothy markets, might result in the proposed higher valuation.”

Trade Me CEO Anders Skoe played down the listing talk this morning. “It’s business as usual for us. There are no immediate plans for our owners to sell.”

If the listing does go ahead next year, it will be a case of back-to-the-future.

Trade Me was listed on the NZX before delisting in 2018 after its sale to Apax, which paid $2.56b for the Sam Morgan-founded firm following a bidding war with US private equity outfit Hellman & Friedman.

Apax recruited Anders Skoe – who had been running a classified ad site in Norway – as Trade Me’s new CEO. Skoe still runs the company.

Skoe oversaw a restructure to cut costs shortly after the private equity company took over. In May 2020 after the coronavirus hit, Trade Me – which employed 600 – sought to trim 20 per cent from its wage bill.

If it does proceed, the return to the NZX would help fill the gap left by 2degrees and Orcon, who put their respective IPO plans on hold to discuss a merger.

The sale to Apax was the latest in a series of ownership changes for the relatively young company, formed by Morgan in 1999.

Morgan sold it to Australian media company Fairfax in 2006 for $700m.

Trade Me ownership returned to our shores, to a fashion, in 2011 as Fairfax floated the company on the NZX at a $1.07b valuation as it sought cash to pay down debt.

Fairfax retained a 51 per cent stake after the float, but sold its holding in 2012.

Trade Me has not published any financials during its period of privately-held ownership under Apax.

On August 22, 2018, during its final two months on the NZX, Trade Me said it was distributing $100m via a 22 cents per share special dividend, as the company hit $250m revenue for the first time to deliver a 3.9 per cent increase in net profit for the year to June 30 of $96.6m.

The company has continued to expand through acquisition under Apax.

On August 8 this year, the Commerce Commission granted Trade Me clearance to buy real estate site homes.co.nz for an undisclosed sum.

In a Companies Office filing, Trade me said its FY2019 net profit fell to $74m but its revenue rose to $267m. The firm has yet to file its 2020 numbers.

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