Metroglass floats $244.2M of shares

Metro Performance Glass, which has more than half the New Zealand glass processing market, will raise $244.2 million in an initial public offer, almost all of which will go to its owners who have spent $40M since taking control.

The Auckland-based company will sell 143.7M shares at $1.70 apiece, according to a prospectus lodged with the Companies Office today.

Of the money raised, some $230.5M will buy the Metroglass assets from its private equity owners Crescent Capital and Anchorage Capital and senior management, with the private equity owners keeping a combined stake of 18.5 percent and management retaining 3.8 percent.

Some $10.9M will cover the cost of the offer and $2.8M will go towards reducing debt. Net debt will be about $50M upon listing.

Chief executive Neil Rigby told a conference call the private equity owners have invested about $40M over the past three years, including upgrading its facilities, and anticipate capital expenditure of about $5M over the next three to five years.

Metroglass's owners took over in 2012 after the company's lenders forced a restructure of the then-heavily leveraged firm following a declining residential construction market in mid-2008.

"The New Zealand value added glass processing market is forecast to grow, driven in particular by the expansion of the residential construction market and the improving commercial construction market," chairman John Goulter said in the prospectus.

The price was set in a bookbuild last week, coming in near the bottom of an indicative range between $1.65 and $1.90.

Metroglass expects to lift net profit to $14.3M in the 12 months ending March 31, 2015 from $12M in 2014, with annual sales forecast to rise to $171.9M from $155.4M.

The offer is expected to open on July 15, with an ASX and NZX listing flagged for July 30.

The sale price implies a market value of $314.6M.