HRnetGroup, Singapore's largest recruitment firm, yesterday lodged a preliminary prospectus for a listing on the Singapore Exchange mainboard, with plans to start trading on June 16.
The group expects to raise up to $175 million by issuing 194 million new shares at between 80 cents and 90 cents per share, according to a term sheet seen by The Straits Times. These figures were not included in the preliminary prospectus lodged with the Monetary Authority of Singapore (MAS).
If demand is strong enough, an extra 11 million shares, or 1.1 per cent of the enlarged share capital, may be offered. This works out to an estimated market cap of up to $910 million, or up to $920 million if the over-allotment option is exercised.
More than 50 per cent of the total offer size has already been taken up by seven cornerstone investors.
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That leaves 84 million placement shares and six million shares on offer to retail investors.
Cornerstone investors include Aberdeen Asset Management, Affin Hwang Asset Management, Credit Suisse on behalf of certain private banking clients, FIL Investment Management (Hong Kong) and Meiji Yasuda Asset Management Company. TechnoPro, one of Japan's largest technology-focused staffing and service companies, and Jasdaq-listed recruiter en-japan inc, are strategic investors.
HRnetGroup was founded by chairman Peter Sim, who set up HRnet One in 1992, with two main businesses in professional recruitment and flexible staffing. It now operates in 10 Asian cities: Singapore, Kuala Lumpur, Bangkok, Hong Kong, Taipei, Guangzhou, Shanghai, Beijing, Tokyo and Seoul. In Singapore, the group has a market share of 20.5 per cent.
Last year, HRnetGroup pulled in $365 million in revenue and achieved a net profit of $41 million. All growth has been organic and the group has turned a profit every year except in 1998. IPO proceeds will be used for business expansion and potential acquisitions. The group had a cash balance of $106 million as at Dec 31 last year.
The IPO will also enable the group to build a co-ownership model, allowing up to 404 employees to become shareholders - and to therefore be inspired to keep delivering profits. A total of 22 shareholders in certain group subsidiaries will have the option to swap those interests for shares in the company. Post-IPO, Simco, the Sim family vehicle, will control about 74 per cent of HRnetGroup.
Heliconia Capital Management, a Temasek Holdings unit, has been a shareholder since last October and will hold about 2 per cent post-IPO.
Both the Sim family and Heliconia have agreed to a six-month lock-up period from the listing date.
Credit Suisse and Deutsche Bank are joint global coordinators and are also joint underwriters with DBS and Nomura. Credit Suisse is the stabilising manager.
The HRnetGroup IPO will be SGX's second mainboard listing this year after Dasin Retail Trust raised $121 million in a January IPO. There have been four Catalist listings this year from Aoxin Q&M, UnUsUaL, Kimly and Samurai 2K Aerosol. All are trading above their debut price.