McGrath Estate Agents is selling shares in its float at between $1.80 and $2.25 each, creating a real estate chain with a market value of between $254 million and $295.7m.
The pricing equates to between 12 and 14 times its forecasted net profit for the 2016 financial year, as first reported by the BusinessNow blog.
McGrath, one of the leading residential real estate chains across Australia, is embarking on its management roadshow this week for an initial public offering through joint lead managers JPMorgan and Bell Potter and adviser Luminis Partners.
The IPO will raise between $121.2m and $135.2m.
Under the offering, between 60.4 million to 67.8 million shares will be issued.
Of those around half, or between 29.4m and 36.8 million, will be issued by McGrath.
The McGrath path finder is due to be issued today ahead of a book build on November 12.
The prospectus will be lodged on November 16 before the company lists on December 9.
McGrath’s annual dividend yield will be between 3.6 per cent and 4.1 per cent.
Its enterprise value will be between $244m and $286m.
The real estate chain run by high-profile founder John McGrath has 73 offices and notched up $12.3bn in residential sales during the 2015 financial year.
It’s a company being pitched as something of a roll-up story, with McGrath recently buying the largest franchise group within its network, comprising 10 offices across northern Sydney, in a deal believed to be worth at least $50m.
More acquisitions are on the cards.
This article first appeared in The Australian Business Review