It is understood Hipages will look to raise $40 million through an issue of new shares for its IPO, while a shareholder selldown would account for another $50 million to $70 million.
The amount of the selldown depends on how much Hipages’ existing shareholders – including News Corporation’s News Pty Ltd, fund manager Ellerston Capital and venture capital firm Right Click Capital – sell into the transaction, which is yet to be determined.
GS says Hipages worth up to $370m
Sources said News Corp – which owns about 30 per cent of the business – was unlikely to be a big seller, while Right Click wanted to offload some of its stake.
Funds raised would help Hipages pay off $12 million in venture debt and help the company invest in its brand and products. The 200-person Hipages helps tradespeople generate business leads through an online marketplace but wants to expand into tradie invoicing and payments solutions next year.
Goldman Sachs sent out a 42-page pre-deal investor education report to fund managers on Tuesday morning and would launch a week-long management roadshow from next Monday.
The report – written by Goldman Sachs analysts Ashwini Chandra and Sophie Carran – ran potential investors through Hipages’ business, financials, growth drivers and risks to its operating model.
It said Hipages was worth somewhere between $280 million and $370 million on an enterprise value basis.
That $370 million figure was based on a 50:50 weighting between two different valuation approaches, one using a 10-year discounted cash flow model and the other based on an EV/EBITDA multiple, using the company’s fiscal 2021 forecast earnings of $9.9 million.