Shares in chicken producer Tegel have been priced in an indicative range of $1.55 to $2.50, giving the company an implied market value of up to $636 million, according to the product disclosure statement.
The shares will be listed on the NZX main board and Australia's ASX on May 3, with the deal expected to raise between $299.1 million and $344.4 million.
More than $130 million of the cash raised will be used to repay bank debt, while up to $163 million go to holders of Tegel's redeemable shares.
The remaining $22.5 million to $25.3 million will cover IPO costs, including an $8 million bonus for senior management.
Final pricing of the shares will be set in through an auction-style bookbuild process with institutions and brokers on April 18 and 19.
A broker firm offer to retail clients of selected NZX firms will open on April 20 and close on April 29.
The deal gives Tegel an indicative price-to-earnings multiple of 12.7 to 14.7 times, which compares with analyst trading valuations ranging from 14.7 times to 18.5 times with an average midpoint of 16 times.
It gives the Auckland-based firm, New Zealand's biggest poultry producer, an implied enterprise value of $672 million to $756 million and an implied market capitalisation of $552 million to $636 million.
Tegel's majority owner Affinity Equity Partners will sell down around 30 per cent of its existing 87 per cent stake to retain about 45 per cent of shares in the company following the deal, according to the PDS.
Affinity won't be able to further sell down its stake until the release of 2017 full-year financial results.
However, 50 per cent of Affinity's stake could be released early following the 2017 half-year result if Tegel's share price has gained 20 per cent on its issue price at that time.
Management won't sell down any of their existing 1.3 per cent stake and will retain 0.8 per cent of the company following the offer.
A gross dividend yield of 6.2 to 7.1 per cent, fully imputed, is expected, according to the PDS.
Affinity purchased the business in 2011 for $605 million from Australia's Pacific Equity Partners.
The chicken firm has operations across New Zealand and around 2000 staff.
Tegel will be the first IPO of the year after a sluggish 2015, which saw a number of sales deferred in turbulent financial markets.
While private equity owners have attracted scepticism after the failure of consumer electronics store Dick Smith Holdings, investors have been more optimistic about the potential fortunes for Tegel.
The company expects poultry sale volumes to rise to 92,814 tonnes by the 2017 year, of which 16,705 tonnes will be exports.
That compares with 80,273 tonnes sold in 2015, including 13,125 tonnes of exported product.
In a letter to investors, chairman James Ogden said Tegel plans to focus on new product developments to increase the value and volume of poultry sold, expand value-added production, develop new sales channels, and enter new export markets.
The deal is being managed by Deutsche Bank/Deustche Craigs, Goldman Sachs and First NZ Capital.
- With BusinessDesk