Link Group heads for $2b ASX debut

Link Group is seeking to raise nearly a billion dollars ahead of making a stock market debut in late October.

Australian Stock Exchange.

Link Group is seeking to raise up to $946.5 million ahead of making its November stock market debut. (AAP)

Financial data services operator Link Group has begun courting investors as it prepares to launch the biggest Australian share market float for the year.

Link has grown in the past 14 years from being just a share registry operator to being a global financial technology company and one of Australia's largest superannuation administration providers.

It has made more than 30 acquisitions in the past 10 years and continues to be on the look for more acquisitions, including expanding its overseas business.

The company plans to raise up to $946.5 million ahead of its stock market debut on October 27.

It is selling up to 162.5 million shares priced at between $5.41 and $6.37 each in its initial public offer and expects to be worth about $2 billion when its shares begin trading.

Chief executive John McMurtrie is confident Link will attract strong investor interest despite recent market volatility.

He says Link has the traits of a defensive stock with strong growth prospects and a long history of strong underlying earnings growth.

"We have had uninterrupted growth in earnings before interest, tax, depreciation and amortisation (EBITDA) since 2002," he said.

"Even during the global financial crisis we were still able to grow EBITDA; so the business has defensive qualities."

However, he said Link would likely pay a modest dividend of up to 2.5 per cent of the share price during the 2016 financial year.

Chief financial officer John Hawkins said Link's key competitive advantage was its technology and digital platforms as more superannuation funds and companies outsource administrative functions.

Link also has capacity in its debt structure for more acquisitions, he added.

"We continue to look for opportunities," he told AAP.

"Only seven per cent of our revenue is earned outside of Australia and New Zealand.

"There is an opportunity for our foreign jurisdictions to expand their footprint but there are also opportunities in Australia, and if they are appropriately priced, we will pursue."

The company has forecast a pro forma net profit of $59.1 million and a statutory net profit of $27.5 million for fiscal 2016.

Underlying earnings are expected to rise to $127.5 million, compared to $84.5 million in 2014/15.

Pacific Equity Partners will be the biggest single shareholder after the company lists on the ASX, with a 30.3 per cent stake.

Mr McMurtrie will hold a 3.44 per cent stake.


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Source: AAP



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