Scales shares set at bottom of range for IPO

Photo / Glenn Taylor

Scales Corp's share price has been set at $1.60 a share - the bottom end of an indicative $1.60 to $1.85 range -- after an auction-style for the initial public offer was conducted earlier this week.

The final offer size was reduced to 93 million ordinary shares from the original maxium of 100.8 million -- raising $149 million, including $30 million of new capital to provide flexibility for the future expansion of the business.

Private equity company Direct Capital Investments, together with its co-investors the New Zealand Superannuation Fund and ACC, said it will retain a cornerstone shareholding of 20 per cent in Scales following the offer.

Scales said the offer received "very strong" support from institutional investors and NZX Firms, with demand significantly exceeding the size of the offer at the final offer price.

Around half of the offer has been allocated to institutions in New Zealand, Australia and Asia with the remaining allocated to certain NZX Firms on behalf of their retail investor clients.

"We are delighted to be welcoming 12 domestic institutions, several global agriculture funds and retail clients from all of the major NZX broking firms as investors in Scales," chairman Jon Mayson said in a statement.

Based on the final offer price of $1.60 per share, the company's market capitalisation will be $224 million.

Scales is one of New Zealand's oldest companies and about 65 per cent of its business is in Hawke's Bay, the majority with is apple growing business Mr Apple representing about half of its business activities.

Mr Apple is Hawke's Bay's largest apple producer and the country's biggest apple exporter, employing more than 1000 people at the height of the season and about 270 permanent staff.

In the 2013 financial year, Scales recorded an after-tax profit of $20.4 million on record revenues of $272.8 million.