Trade Me private equity owners eyeing sharemarket float in 2024

The private equity firm that took TradeMe private in 2019 is looking for an exit, the Herald understands.

Trade Me could soon be back on investors’ watchlists with discussions under way to relist the company on the New Zealand and Australian stock exchanges next year.

London-based private equity firm Apax Partners, which took over Trade Me for a hefty $2.56 billion five years ago, is considering listing it again, two separate sources confirmed to the Herald.

Apax had not officially appointed advisers for any transaction, but was “considering exit options”, one source said.

Those options included a full or partial dual-listing on the NZX and ASX, or a trade sale to a competitor or another private equity firm.

A partial listing was the preferred option because the asset was too large to list in full at once, and there was no logical trade buyer in the market that could afford to purchase it, the Herald understands.

If a listing went ahead it would likely occur in the 2024 calendar year, marking the second time ownership of the online marketplace was offered to the public.

Trade Me chief executive Anders Skoe said it was “business as usual” in an emailed statement.

“There are no immediate plans for our owners to sell,” he said.

“We’re focused on what we do best. Making it easy for Kiwis to buy and sell on a safe and trusted platform.”

Trade Me had been listed for eight years on both the NZX and ASX when Apax paid shareholders NZ$6.45 a share to take it private in February 2019.

It followed a bidding war with US private equity firm Hellman & Friedman, with the final takeover price being a 27 per cent premium to Trade Me stock’s one month volume-weighted average price, according to S&P Global Market Intelligence, and north of independent adviser Grant Samuel’s valuation of $5.93 to $6.39 a share.

The deal was overwhelmingly supported by local investors, with more than 99 per cent voting in favour of the scheme of arrangement at the time.

Trade Me was founded by Sam Morgan in 1999. He sold it to media company Fairfax Media in 2006 for $700m.

In 2011 Fairfax floated 51 per cent of the company on the ASX and NZX at a $1.07b valuation, or $2.70 a share. Fairfax sold its majority stake the following year.

It’s not entirely clear how Trade Me has fared financially while in private equity hands.

In 2019 financial statements filed to the Companies Office, the company revealed a 24.5 per cent drop in annual profit to $72.9m, from $267.9m of revenue.

In 2020 Trade Me proposed a 20 per cent reduction to its wages bill and in August 2021, was cleared to buy the real estate website homes.co.nz for an undisclosed sum.

Apax bought Trade Me through its US$9b Apax Europe IX fund, which was created in 2016 specifically to buy out software, information technology and healthcare companies worth between US$1b and US$50b.

Private equity funds typically had a set life cycle after they closed, at which point the fund manager was expected to return profits to investors in the fund, and the firm would take a cut.

Chapman Tripp partner Roger Wallis, who advised Metlifecare on its $1.3b sale to private equity fund EQT Infrastructure IV, said it was “about the time in the life cycle of private equity” for Apax to consider selling down or out of Trade Me.

In 2021, the Australian reported Apax was considering a $3b dual-listing of Trade Me on the NZX and Australian stock exchange for 2022, but that did not eventuate.