The Financial Review seems very interested in the autobody repair space. This story appeared in the Street Talk section on 28 May.
Smash repairs roll-up Collision Services Industries (CSI) is pitching its initial public offering at a hefty discount to listed rival AMA Group.
CSI will seek to raise $73.5 million at $1 a share at a bookbuild on June 12, according to terms sent to fund managers on Tuesday.
The IPO would value CSI at 7.4 to 7.9-times forecast earnings, on an EV/EBITDA basis, or 11.7 to 12.5-times profit, based on 2019 financial year proforma forecasts.
Fund managers are likely to compare the pricing to listed smash repairer AMA Group, which is trading at 13-times EBITDA and 24-times profit.
The significant discount represents CSI's smaller network and lack of a track record.
CSI's brokers Ord Minnett, Evans Dixon and Shaw and Partners blasted terms to fund managers on Tuesday morning.
If successful, the company would list with a $111 million to $118.5 million market capitalisation on July 19, the term sheet said.
CSI is the proposed combination of 11 smash repairs businesses with 23 operating sites across the eastern seaboard.
It is a smash repairs roll-up overseen by CEO Darrel Maloney and Strategic Equity Alliance - the firm behind National Veterinary Care and Greencross, among others - and is making a high growth pitch to potential investors.
The business expects $130.2 million revenue in the 2019 financial year and $15 million EBITDA.
The business comes to market with contracts underpinned by insurer IAG and others, with 80 per cent of insurer revenue "exclusive and preferred", according to details in front of potential investors.
Funds raised at the IPO would be used to pay cash consideration as part of the underlying acquisition agreements, provide working capital, repay convertible notes and costs of the offer.