Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<p>The morning of 29 October pre-open, <a href="https://www.smartkarma.com/entities/macquarie-group-ltd" target="_blank" data-smartkarma-citation="entities:310:1" rel="noopener">Macquarie Group (MQG AU)</a> halted trading, reported H1 earnings (<a href="https://www.asx.com.au/asxpdf/20211029/pdf/4528z984zgfv9b.pdf" target="_blank" rel="noopener">results</a>, <a href="https://www.asx.com.au/asxpdf/20211029/pdf/4528z70j885sny.pdf" target="_blank" rel="noopener">presentation</a> on earnings and capital raise, a <a href="https://www.asx.com.au/asxpdf/20211029/pdf/452b4xst6354m1.pdf" target="_blank" rel="noopener">A$2.72 dividend</a> for record date 9 November) and then conducted a A$1.5bn institutional capital raise. </p><p>The Group sold 7.7mm shares at A$194.00/share, a 1.9% discount to close after starting the bookbuild at a 4% discount, with shares sold settling on 3 November and eligible to receive the upcoming dividend. Existing institutional shareholders were entitled to participate up to a pro-rata total and 90% of the 7.7mm shares were placed with existing shareholders with the other 10% placed with new shareholders. </p><p>As noted on Friday in the presentation, Macquarie's non-institutional shareholders will be entitled to participate in a Share Purchase Plan for up to A$30,000 each, with that offer opening on 8 November (i.e. NOT entitled to receive the dividend) and closing 26 November. The price will be the lower of the A$194.00 Placement Price less A$2.72/share of dividends and a price equivalent to 98% of the five day VWAP through the close of the SPP Period. This will be a no-brainer for existing holders (there are 173,000 holders as of the last Annual Report with 1,000 shares or fewer).</p><p>This will have effects on index trackers. </p>

The morning of 29 October pre-open, Macquarie Group (MQG AU) halted trading, reported H1 earnings (results, presentation on earnings and capital raise, a A$2.72 dividend for record date 9 November) and then conducted a A$1.5bn institutional capital raise. The Group sold 7.7mm shares at A$194.00/share, a 1.9% discount to close after starting the bookbuild at a 4% discount, with shares sold settling on 3 November and eligible to receive the upcoming dividend. Existing institutional shareholders were entitled to participate up to a pro-rata total and 90% of the 7.7mm shares were placed with existing shareholders with the other 10% placed with new shareholders. As noted on Friday in the presentation, Macquarie's non-institutional shareholders will be entitled to participate in a Share Purchase Plan for up to A$30,000 each, with that offer opening on 8 November (i.e. NOT entitled to receive the dividend) and closing 26 November. The price will be the lower of the A$194.00 Placement Price less A$2.72/share of dividends and a price equivalent to 98% of the five day VWAP through the close of the SPP Period. This will be a no-brainer for existing holders (there are 173,000 holders as of the last Annual Report with 1,000 shares or fewer).This will have effects on index trackers. 

Macquarie Placement - Index Effects Dispersed Over Time and Space

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/macquarie-group-ltd" target="_blank" data-smartkarma-citation="entities:310:1" rel="noopener">Macquarie Group (MQG AU)</a>  is looking to raise US$1.1bn in its institutional placement.</p><p>In this note, we will look at deal dynamics, performance of past deals, its recent results and run the deal through our ECM framework.</p><p>We covered its 2019 placement in:</p><ul><li>
<a href="https://www.smartkarma.com/insights/macquarie-group-placement-small-in-relative-terms-but-seems-opportunistic" target="_blank" data-smartkarma-citation="insights:32048" rel="noopener">Macquarie Group Placement - Small in Relative Terms but Seems Opportunistic</a> </li></ul>

Macquarie Group (MQG AU)  is looking to raise US$1.1bn in its institutional placement.In this note, we will look at deal dynamics, performance of past deals, its recent results and run the deal through our ECM framework.We covered its 2019 placement in:
Macquarie Group Placement - Small in Relative Terms but Seems Opportunistic 

Macquarie Group Placement - Similar to Its 2019 Placement Which Did Well

APM Human Services / Equity Capital Markets

<p>APM, an international human services provider, aims to raise around US$730m via a mix of selling primary and secondary shares in its Australian IPO. APM runs 800 sites spanning 10 countries with its largest market being Australia. </p><p>In FY21, APM supported over one million individuals which included 600,000 jobseekers; 180,000 people with disabilities; 100,000 people with mental health needs; 50,000 offenders and ex-offenders; and 30,000 veterans. APM’s main services include: Employment services, Health and Wellbeing, Communities and Assessment and Disability and Aged care support services. </p><p>Its revenue grew by 49% YoY in FY20 and was up another 28% in FY21 and is expected to grow by 31% in FY22. Its EBITDA and NPATA growth have been even stronger with EBITDA growing at 50%+ each year while NPATA has more than doubled in each of the past two years. Going forward, APM expects its revenue to grow by 31% YoY in FY22, with services margin growing by 27.7% YoY, EBITDA by 26% and NPATA by 20.7% YoY.</p><p>However, most of the past growth has been driven by M&amp;A and the company hasn’t been very forthcoming with data disclosures. Moreover, both of its largest contracts are due for an overhaul in 2022-23 which could impact its earnings.</p>

APM, an international human services provider, aims to raise around US$730m via a mix of selling primary and secondary shares in its Australian IPO. APM runs 800 sites spanning 10 countries with its largest market being Australia. In FY21, APM supported over one million individuals which included 600,000 jobseekers; 180,000 people with disabilities; 100,000 people with mental health needs; 50,000 offenders and ex-offenders; and 30,000 veterans. APM’s main services include: Employment services, Health and Wellbeing, Communities and Assessment and Disability and Aged care support services. Its revenue grew by 49% YoY in FY20 and was up another 28% in FY21 and is expected to grow by 31% in FY22. Its EBITDA and NPATA growth have been even stronger with EBITDA growing at 50%+ each year while NPATA has more than doubled in each of the past two years. Going forward, APM expects its revenue to grow by 31% YoY in FY22, with services margin growing by 27.7% YoY, EBITDA by 26% and NPATA by 20.7% YoY.However, most of the past growth has been driven by M&amp;A and the company hasn’t been very forthcoming with data disclosures. Moreover, both of its largest contracts are due for an overhaul in 2022-23 which could impact its earnings.

APM Human Services IPO - Strong past Growth but Has Ample Unhappy Employees and Clients

Transurban Group / Equity Capital Markets

<div>
<p>Transurban has almost raised (barring the shortfall) around US$3.2bn (A$4.2bn) via a mix of entitlement offer and private placement to fund the acquisition of the remaining 49% stake in WestConnex. In this note, we will talk about the retail entitlement worth US$273m (A$371m) which was launched today.</p>
<p>We have covered most aspects of the deal in our earlier note <a href="https://www.smartkarma.com/insights/transurban-entitlement-and-shortfall-well-flagged-deal-for-a-well-known-asset" target="_blank" rel="noopener">Transurban Entitlement and Shortfall - Well Flagged Deal for a Well Known Asset</a>. </p>
</div><div><p>We have covered some of the prior entitlement offer related shortfall bookbuilds in the past:</p></div><div><ul style="list-style-type: disc;">
<li><a href="https://www.smartkarma.com/insights/acquisition-appears-attractive-and-track-record-remains-stellar-but-upside-seems-limited" target="_blank" rel="noopener">Nov 2015: Acquisition Appears Attractive and Track Record Remains Stellar but Upside Seems Limited</a></li>
<li>Dec 2017: <a href="https://www.smartkarma.com/insights/transurban-entitlement-offer-uncertainty-abound" target="_blank" rel="noopener">Transurban Entitlement Offer - Uncertainty Abound</a>
</li>
<li>Sep 2018: <a href="https://www.smartkarma.com/insights/transurban-entitlement-and-short-fall-long-term-value-accretion-with-short-term-earnings-drag" target="_blank" rel="noopener">Transurban Entitlement and Short-Fall - Long-Term Value Accretion with Short-Term Earnings Drag</a> and <a href="https://www.smartkarma.com/insights/transurban-retail-short-fall-quick-take-much-better-positioned-now" target="_blank" rel="noopener">Transurban Retail Short-Fall - Quick Take - Much Better Positioned Now</a>
</li>
<li>Aug 2019: <a href="https://www.smartkarma.com/insights/transurban-retail-short-fall-quick-take-much-better-positioned-now" target="_blank" rel="noopener">Transurban Retail Short-Fall - Quick Take - Much Better Positioned Now</a>
</li>
</ul></div><div><p></p></div>


Transurban has almost raised (barring the shortfall) around US$3.2bn (A$4.2bn) via a mix of entitlement offer and private placement to fund the acquisition of the remaining 49% stake in WestConnex. In this note, we will talk about the retail entitlement worth US$273m (A$371m) which was launched today.
We have covered most aspects of the deal in our earlier note Transurban Entitlement and Shortfall - Well Flagged Deal for a Well Known Asset. 
We have covered some of the prior entitlement offer related shortfall bookbuilds in the past:
Nov 2015: Acquisition Appears Attractive and Track Record Remains Stellar but Upside Seems Limited
Dec 2017: Transurban Entitlement Offer - Uncertainty Abound

Sep 2018: Transurban Entitlement and Short-Fall - Long-Term Value Accretion with Short-Term Earnings Drag and Transurban Retail Short-Fall - Quick Take - Much Better Positioned Now

Aug 2019: Transurban Retail Short-Fall - Quick Take - Much Better Positioned Now



<p><a href="https://www.smartkarma.com/entities/scientific-games-corp-a" target="_blank" data-smartkarma-citation="entities:9746:1" rel="noopener">Scientific Games Corp A (SGMS US)</a> aims to raise around US$3.7bn (A$5bn) via selling a majority of its stake in SG Lottery (SGL) in an Australian IPO.</p><p>SGL runs a global lottery business supplying lottery products and services across the lottery ecosystem. It works with various governments globally who use its products and services to run their lotteries. As of FY20, SGL had more than 130 customers in over 50 countries. Revenue from North America and Europe accounted for 73% and 24% of its FY20 revenue, respectively.</p><p>SGL generates most of its sales from instant lottery products. It has supplied instant lottery products to 40 of the 46 US jurisdictions that sell instant lottery products and has sold instant lottery products to customers in approximately 50 countries. Its  relationship with its top 10 customers have been ongoing for an average 35 years.</p><p>SGL has been reporting steady past growth and margins have been relatively stable as well.</p>

Scientific Games Corp A (SGMS US) aims to raise around US$3.7bn (A$5bn) via selling a majority of its stake in SG Lottery (SGL) in an Australian IPO.SGL runs a global lottery business supplying lottery products and services across the lottery ecosystem. It works with various governments globally who use its products and services to run their lotteries. As of FY20, SGL had more than 130 customers in over 50 countries. Revenue from North America and Europe accounted for 73% and 24% of its FY20 revenue, respectively.SGL generates most of its sales from instant lottery products. It has supplied instant lottery products to 40 of the 46 US jurisdictions that sell instant lottery products and has sold instant lottery products to customers in approximately 50 countries. Its  relationship with its top 10 customers have been ongoing for an average 35 years.SGL has been reporting steady past growth and margins have been relatively stable as well.

SG Lottery Pre-IPO - First Look at Possibly Australia’s Largest IPO in 2021

Australia

Macquarie Group Ltd. offers banking, financial advisory, investment and funds management services.  The Company offers financial advice, cash management, wealth management and private banking, life insurance, securities brokerage, corporate debt financing, real estate funds management, real estate development financing, investment funds management, and foreign exchange services.

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Macquarie Group (MQG AU)

Macquarie Placement - Index Effects Dispersed Over Time and Space

Macquarie placed 7.7mm shares at a 1.9% discount after reporting earnings Friday. They will launch a Share Purchase Plan later this month. If the...

Travis Lundy

Macquarie Group Placement - Similar to Its 2019 Placement Which Did Well

Macquarie Group is looking to raise US$1.1bn in its institutional placement.In this note, we will look at deal dynamics and run the deal through...

Sumeet Singh

APM Human Services IPO - Strong past Growth but Has Ample Unhappy Employees and Clients

APM, an international human services provider, aims to raise around US$730m in its Australian IPO. APM runs 800 sites spanning 10 countries with...

Sumeet Singh

Transurban Retail Shortfall Quick Note

Transurban has almost raised around US$3.2bn (A$4.2bn) via a mix of entitlement offer and private placement. In this note, we will talk about the...

Sumeet Singh

SG Lottery Pre-IPO - First Look at Possibly Australia’s Largest IPO in 2021

Scientific Games Corp A (SGMS US) aims to raise around US$3.7bn (A$5bn) via selling a majority of its stake in SG Lottery (SGL) in an Australian IPO.

Sumeet Singh

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