Childcare roll-up Evolve Education Group has set the price for its initial public offer at $1 per share and will have a market value of $177 million after it floats on the NZX and Australia's ASX on December 5.
The company has registered a prospectus for the offer today following the completion overnight of a fixed-price book-build process with Australasian institutions and participating brokers.
Demand for the offer was strong, with one New Zealand fund manager receiving less than half the Evolve stock it had requested.
Evolve is selling around 75 per cent of the company through the IPO, issuing 132 million shares at $1 each, the proceeds of which will be used to fund the purchase New Zealand childcare businesses including Lollipops Educare and Porse.
The company said it would have a total of 177.1 million shares on issue following the completion of the offer, giving it an indicative market capitalisation of $177.1 million.
Evolve has forecast a loss of $9.5 million from revenue of $29 million in the period to March 2015, rising to a $16.6 million profit from revenue of $136.2 million in the 12 months to March 2016.
The company expects a net dividend yield of 4.69 per cent in the 2016 financial year, according to the prospectus.
Evolve said a significant portion of its revenue would come from government early childhood education funding.
"It is pleasing to have such strong investor support and to have secured the funds to make Evolve Education a reality," chairwoman Norah Barlow, the former chief executive of NZX-listed retirement village operator Summerset Group, said in a statement.
She said the company aspired to be a leading provider of early childhood education in New Zealand.
"The early childhood education sector represents an attractive investment opportunity," Barlow said. "Demand for childcare continues to strengthen year-on-year, driven by underlying trends, such as increasing female participation in the work force, rising household income levels and continued Government support."
Barlow said the "highly fragmented" nature of the childcare industry meant there was scope for Evolve to increase its scale through "selective acquisitions".
Evolve's management team is led by chief executive Alan Wham, the former boss of Pharmacybrands.
Lollipops Educare's Mark Finlay and other shareholders from that company will be issued shares as part of the acquisition of Lollipops and will retain a roughly 20 per cent shareholding in Evolve following the IPO.
Retail clients of participating brokers will be able to purchase shares through the broker firm offer, which opens on November 24 and closes on December 3.
Forsyth Barr and Goldman Sachs are managing the offer, which does not have a general public pool.