It counts Heliconia Capital Management, a unit of Temasek Holdings, as an investor following an undisclosed investment earlier this year. It is expected to maintain an equity interest of about 2 per cent post-IPO.
The company plans to issue 194 million new shares priced at between S$0.80 to S$0.90 per share and is expected to commence trading on 16 June 2017. Additionally, there is a greenshoe option or provision to sell more shares than originally planned, of 11 million shares. This amounts to 1.1 per cent of the enlarged share capital.
Deutsche Bank is the sole issue manager for the deal, as well as a joint global co-ordinator and bookrunner with Credit Suisse. DBS and Nomura are also on the book-running team. Founded in 1992 as HRnetOne by chairman Peter Sim, it offers professional recruitment and flexible staffing.
The financial terms see HRnetGroup priced as a mid-cap firm (i.e. a company with a market capitalisation between $300 million and $2 billion), given an estimated market capitalisation of up to S$910 million ($657.4 million). With the greenshoe option exercised, this increase to S$920 million ($664.7 million).
2016 saw HRnetGroup post revenue of S$365 million and S$48.4 million in net profit, with 1998 being the sole year it did not report profitability. It maintains operations in Singapore, Kuala Lumpur, Bangkok, Hong Kong, Taipei, Guangzhou, Shanghai, Beijing, Tokyo and Seoul.
The IPO proceeds will finance business expansion and potential acquisitions, with the firm reporting a cash balance of S$106 million as at 31 December 2016. It plans to further engage its senior employees through allowing them to become shareholders and share its profits.
More than 50 per cent of the total offer size is subscribed to by seven cornerstone investors: Aberdeen Asset Management, Affin Hwang Asset Management, Credit Suisse on behalf of private banking clients, FIL Investment Management (Hong Kong) and Meiji Yasuda Asset Management Company.
This development sees 84 million private placement shares remaining, with 6 million shares on offer to retail investors. Strategic investors who’ve backed the recruitment firm include Japan’s TechnoPro, a technology-focused staffing and service companies, and Jasdaq-listed recruiter en-japan inc.
Post-IPO, Sim’s family vehicle, Simco, will hold about 74 per cent of its equity. Simco and Heliconia have committed to a six-month lockup period from the listing date.