Pension specialist Xafinity has been valued at £190.3m following its initial public offering (IPO) in London.
The pension actuary, consultant and administrator to more than 550 schemes raised £46m from its public debut. This will be used, along with existing cash, to cut debt to £33m from £86m.
The majority of the proceeds, however, some £125m, go into the pockets of the selling shareholders.
Private equity firm CBPE Capital ends its three-year ownership of Xafinity following the IPO by selling its entire shareholding. It bought the company for an undisclosed sum in 2013.
Management also took some cash off the table by reducing its shareholding to 5% from 8%. Management is now locked in and cannot sell any more of its shares for the next 12 months.
Institutions snapped up the shares at 139p each, despite the private equity owner selling its entire stake. A total exit at IPO by a private equity house could be seen by some that it has little optimism in future trading performance.
Perhaps the new shareholders were lured by management’s plan to pay up to 67% of adjusted pre-tax profits as dividends. In the year to 31 March 2016, Xafinity reported pre-tax earnings before interest, depreciation and amortisation of £16.7m.
Xafinity co-chief executive Paul Cuff said the IPO is the logical next step in the company’s strategy. A public listing could enhance its profile when looking to win new business as well as provide access to capital when needed.
Shares in the National Pension Trust owner start trading on the main market on 16 February.
