Listing and Capital Raising in Australia

Listing and capital raising in Australia

November 2015

James GerratyManager, Listings

2

Why Australia?

23 years of uninterrupted growth

Gateway to global capital~45% international investors

Low government debtA long history of funding and listing early stage companies

Robust regulatory environment

3

Why Australia?

ChinaJapan

CanadaBrazil

UK

Sin-gapor

e

FranceIreland

Hong Kong

Aus-tralia

Lux-em-

bourg

United States

$561

$825

$1,030

$1,137

$1,253

$1,453

$1,559

$1,580

$1,686

$1,788

$3,313

$15,665

Investment Fund Assets (US$b)

Access the world’s 3rd largest pool of investable funds

To grow to $6 trillion by 2030

$15,665

Source: Investment Company Institute, Austrade, Q2 2014 Source: Deloitte

4

ASX is a globally recognised market

The world’s 10th largest exchangeby market capitalisation

Rank Exchange Market Capitalisation (A$m)1 Hong Kong Exchanges & Clearing 48.675.52 CME Group Inc 44,588.03 Intercontinental Exchange Inc 34,325.24 Deutsche Boerse AG 23,801.45 London Stock Exchange Group 18,771.36 Japan Exchange Group 12,549.37 Nasdaq OMX Group 11,507.68 BM&F BOVESPA SA 9,237.99 Singapore Exchange Ltd 8,698.3

10 ASX Ltd 8,163.911 CBOE Holdings Inc 6,788.312 Dubai Financial Market 5,719.413 Bolsas Y Mercados Espanoles 4,756.714 Euronext NV 4,083.915 CETIP SA-Mercados Organizado 3,963.616 Moscow Exchange MICEX-RTS 3,658.117 TMX Group Ltd 2,908.018 Bursa Malaysia Bhd 1,532.419 Bolsa Mexicana De Valores SA 1,436.220 JSE Ltd 1,263.1

Source: Bloomberg, 14 July 2015

5

ASX is a globally recognised market

ChinaAustralia

KoreaTaiwan

Hong KongIndia

SingaporeMalaysiaThailand

IndonesiaPhilippinesNew Zea-

land

$1,455$1,257

$815$686

$629$478

$266$160

$137$117

$86$46

Source: S&P World By Numbers report, April 2015

Size of stock markets in Asia-Pacific region(ex-Japan, $US b)

By free-float market capitalisation, ASX ranks3rd in Asia9th in the world

9th

6

An active capital raising platform

Source: Dealogic, January 2015

IPO Capital Raised by Exchange 2014 ($US b)

Consistently ranked in the world’s top 5 equity markets for capital raising

TMXShanghai

Euronext ParisSpanish SE

Saudi SEEuronext Amsterdam

JapanASX

NasdaqHKEx

LSENYSE

$5$6$6$7$7$9$11

$17$25

$28$28

$76 5

7

An active capital raising platform

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 $-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

0

50

100

150

200

250

300

350A$ m Num-

ber

Initial Capital Raised and New Listings

IPO

Cap

ital R

aise

dIP

O V

alue

List

ed

New Listings

2015: 90 new listings (ytd)(2014: 104, 2013: 110)

Positive outlook for IPOs in the near term

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 $-

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000 A$ m

Follow-On Capital Raised

Source: ASX

8

Financials38%

Resources20%

Consumer Discretionary

& Staples14%

Industrials & Materials (ex-Metals & Min-

ing)12%

Tech & Telecoms6%

Health Care5%

Utilities4%

Resources47%

Financials13%

Industrials & Materials (ex-Metals & Min-

ing)11% Consumer

Discretionary & Staples

11%

Tech & Telecoms8%

Health Care7%

Utilities2%

Number of Listed Companies

Market Capitalisation

Total Listings: 2,221

Market Cap: $1.7 trillion

Strongly represented by: Resources and Financials sectorsSmall-cap and growth companies

<$10m $10m-$50m

$50m-$100m

$100m-$500m

$500m-$1b

>$1b

861

466

146

284

77

208

Number of Listed Companies by Market Capitalisation

Source: ASX, July 2015

Companies from all industry sectors

9

1/7/2

000

7/7/2

000

1/7/2

001

7/7/2

001

1/7/2

002

7/7/2

002

1/7/2

003

7/7/2

003

1/7/2

004

7/7/2

004

1/7/2

005

7/7/2

005

1/7/2

006

7/7/2

006

1/7/2

007

7/7/2

007

1/7/2

008

7/7/2

008

1/7/2

009

7/7/2

009

1/7/2

010

7/7/2

010

1/7/2

011

7/7/2

011

1/7/2

012

7/7/2

012

1/7/2

013

7/7/2

013

1/7/2

014

7/7/2

014

1/7/2

0150

50

100

150

200

250Global index performance since 2000

S&P/ASX 200 S&P 500 FTSE 100 Hang Seng FTSE EURO TOP 100 Nasdaq Composite

Source: Bloomberg 03/07/2015

03/07/2

015

Global indices comparisonASX has outperformed its global peers through the “Asian Century”

10Source: Bloomberg, ASX *as at 19/10/2015 **Reverse Take-over

Sector themes: Technology, Healthcare, Listed Investment CompaniesInternational listings, with global reach, attracting strong demand

Code Company Sector CountryMarket Cap

at listing date ($m)

Capital Raised ($m)

Current Price/Sales (forward)*

MYO MYOB Group Software Australia 2,130.0 833.1 6.1

OHE Orion Health eHealth New Zealand 820.0 112.0 2.8

ACX Aconex Software Australia 312.2 140.0 7.5

SDA SpeedCast International Satellite Services Hong Kong 235.5 150.0 2.5

SRF Surfstitch Retail e-commerce Australia 214.0 83.2 1.5

VGI Vista Software New Zealand 171.3 84.0 6.0

UBN Urbanise Software Australia 108.5 20.0 7.3

LAA LatAm Autos Software and Services Ecuador 71.9 18.0 12.9

CAT Catapult Group Technology Hardware Australia 66.1 12.0 9.9

1PG 1-Page** Software and Services USA 24.0 8.5 n/a

Selected small & mid cap IPOs 2014 – 2015

11

Initial listing requirementsTailored to growth companies

Admission Criteria Minimum RequirementNumber of shareholders

Investors Amount Held by unrelated parties

400 $2000 0%

350 $2000 25%

300 $2000 50%

Company SizeProfit Test

$1 millionnet profit

over past 3 years

$400,000net profit

over last 12 months

Assets Test $3 millionNet Tangible Assets

$10 millionMarket CapitalisationOR

OR

OR

OR

Why ASX?

Listing requirements tailored to growth companies

Access a huge pool of funds under management

A globally recognised main market

Gateway to global capital

13

Listing Rules & Process

14

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

The listing process

Step 1Appointment of advisors

Step 2Preparing the prospectus and due diligence

Step 3Institutional marketing program commences

Step 4Lodge prospectus with ASIC

Step 5Lodge listing application with ASX

Step 6Marketing and Offer Period

Step 7Offer closes, shares allocated, trading commences

Indicative schedule – weeks

15

The listing process

Appoint Advisers

Week 1

Professional advisers are involved with the preparation of the prospectus (offer document), participate in the due diligence process for the IPO, price the offering and market the offering to investors.

Commence due diligence & prepare

prospectusWeek 2-10

The Australian Corporations Act contains a general disclosure test for prospectuses. The due diligence process is guided by a committee, comprised of representatives of the company and other parties potentially liable under the prospectus.

Commence institutional marketing

Week 10-12

The Corporations Act strictly limits advertising of an IPO prior to lodgement of the prospectus with ASIC. However, certain marketing activities can be undertaken to institutional investors, including IPO roadshows.

Lodge prospectus with ASIC

Week 11-12

An ‘exposure period’ of seven days starts from the date of lodgement. During this time the prospectus is made available for public review and comment, and during this period the company cannot accept any applications under the offer.

Lodge listing application with ASX

Week 11-16The formal listing application is lodged with ASX within seven days of lodgement of the prospectus with ASIC. Typically, the review and approval of the application by ASX is completed within six weeks.

Marketing & offer period

Week 13-17

The offer to retail investors starts after the exposure period and usually is open for a period of 3 – 5 weeks.

Trading commences

Week 18-19In the final step, the offer closes, shares are allocated and trading commences.

Indicative schedule

16

Listing costs


% of amount raised (median)


Initial Fee Annual Fee

Less than $10m 10.8% $10m $65,000 $24,373

$10m - $50m 9.5% $50m $105,000 $32,022

$50m to $100m 6.9% $100m $135,000 $41,582

$100m to $500m 5.2% $200m $175,000 $45,377

More than $500m 4.9% $500m $295,000 $56,760

Source: compiled by ASX from disclosed figures in company prospectuses 2010-2014.

The above fees apply as of 1 July 2015.Calculation based on securities for which quotation is sought.

Total IPO Costs ASX Costs

17

Periodic and Continuous Disclosure

Periodic • Listing Rule 4

• Annual disclosure: Preliminary Final Report lodged within 2 months of the end of the accounting period. Audited accounts within 3 months.

• Half yearly disclosure: Half year financial report lodged within 2 months of end of accounting period. Must be audited or subject to audit review.

• Quarterly Cash Flow reporting for companies without a track record of revenue or profit

• International Financial Reporting Standards (AIFRS) acceptedContinuous • Listing Rule 3

• Immediate disclosure of information a reasonable person would expect to have a material effect on price or value

• Limited exemptions: for example where the information is confidential and concerns an incomplete proposal or negotiation

• ASX can also require disclosure where it forms the view that it is necessary to correct or prevent a false market

18

Corporate GovernanceThe strengths of the “if not, why not” regime

8Principles

Lay solid foundations

for management and oversight

Structure the board to add

value

Promote ethical and responsible

decision making

Safeguard integrity in

financial reporting

Make timely and balanced

disclosure

Respect the rights of

shareholders

Recognise and manage risk

Remunerate fairly and

responsibly

Focus on disclosure of corporate governance practices rather than prescription

Companies are required to address each principle (and sub-recommendations) and explain areas of departure – so called “if not, why not” reporting

Requirements for an audit committee and a remuneration committee – some prescription in relation to composition, operation and responsibility for constituents of the S&P/ASX 300 index

Profit TestASX does not require escrow

for companies admitted under the profits test

Voluntary Escrow

Underwriting Agreement

Assets Test

Arm’s length 12 months from issue

Non-Arm’s length 24 months from listing

Pre-float investors

Recognition for cash or equivalent contribution of pre-float investors – allows proportion to be unrestricted that represents the cash component

Escrow may not be applied to companies with a track record of profitability, or revenue acceptable to ASX, or companies with a substantial proportion of assets as tangible assets.

Company

24

Escrow requirements

20

Case Studies

Case study: Vista Group (VGI)

Vista Group is a world leading New Zealand company comprising six businesses all providing software solutionsto the global film industry

Purpose of the OfferFund the acquisition ofMovio and MACCsAllow existing shareholders to realise some of their investmentProvide startup capital for Numero and provide capital for future acquisitions and developments

11/8

/14

11/9

/14

11/1

0/14

11/1

1/14

11/1

2/14

11/1

/15

11/2

/15

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/15

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/15

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/15

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/15

80

100

120

140

160

180

200

220

240 VGL NZ ASX 200 ASX 300 Info. Tech

Australia21%

RoW1%

New Zealand

78%

Listing Date: 11 August 2014Market Cap at Listing: $171.3 millionCapital Raised: $83.9 millionPrice/Sales: 3.7P/E Ratio: 34.1EV/EBITDA: 17.3Lead Manager: Macquarie BankCurrent Market Cap: $364.68 million*

111% 2.6% 2.2%

Price performance,rebased at listing date

Institutional & insider shareholding by geography

IPO Snapshot

Source: Orient Capital*as at 3 July 2015

1-Page is a California-based Human Resources technology company which has developed a cloud-based recruitment software platform aimed at improving efficiency in the job recruitment process.

Purpose of the Offer

Raise capital to grow the business

ASX offers a lower barrier of entry to public markets vs US

Listing offered a higher valuation and less dilution vs US venture capital firms

Visibility in Asia-Pacific

Stepping stone to a future US listing

Australia58%

US42%



10/1

4/20

14

10/2

8/20

14

11/1

1/20

14

11/2

5/20

14

12/9

/201

4

12/2

3/20

14

1/6/

2015

1/20

/201

5

2/3/

2015

2/17

/201

5

3/3/

2015

3/17

/201

5

3/31

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5

4/14

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5

4/28

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5

5/12

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5

5/26

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5

6/9/

2015

6/23

/201

580

180

280

380

480

580

680

Listing Date: 14 October 2014Market Cap at Listing: $24 millionCapital Raised: $8.5 millionLead Manager: KTM CapitalCurrent Market Cap: $253.64 million*

Case study: 1-Page (1PG)

Reverse Take-Over Snapshot


449% 8.0% 6.0%

1PG ASX 200 ASX 300 Info. Tech.



IPO Snapshot


Case study: Xero (XRO)

Xero is a New Zealand-based software company that develops cloud-based accounting software for small and medium-sized businesses. The company has offices in New Zealand, UK and USA


Improve visibility, product awareness and marketing opportunities within Australia

Improve liquidity

Improve access to capital markets

Improve access to Australian based investors

11/8

/201

212

/8/2

012

1/8/

2013

2/8/

2013

3/8/

2013

4/8/

2013

5/8/

2013

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2013

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2013

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2013

9/8/

2013

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/201

311

/8/2

013

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/201

31/

8/20

142/

8/20

143/

8/20

144/

8/20

145/

8/20

146/

8/20

147/

8/20

148/

8/20

149/

8/20

1410

/8/2

014

11/8

/201

412

/8/2

014

1/8/

2015

2/8/

2015

3/8/

2015

4/8/

2015

5/8/

2015

6/8/

2015

90190290390490590690790890990

New Zea-land44%

US34%

Australia20%

RoW2%

Listing Date: 8 November 2012Market Cap at Listing: $519 millionPrice/Sales: 24.4Current Market Cap: $2.29 billion*Current Price/Sales: 12.15*

264% 22.9% 26%

XRO ASX 200ASX 300

Info. Tech.



IPO Snapshot


Case study: Aconex (ACX)

Aconex is a cloud collaboration platform for the global construction industry. The Company’s platform enables over 50,000 user organisations worldwide to work on construction projects.


Liquid market for its shares

Additional financial flexibility and access to capital markets

Sell-down by existing shareholders (approx. $90m+)

Working capital

Capital for acquisitions and marketing

Listing Date: 9 December 2014Market Cap at Listing: $312.2 millionCapital Raised: $140 millionPrice/Sales: 4.08P/E Ratio: n/aEV/EBITDA: 238.6Lead Managers: UBS, MacquarieCurrent Market Cap: $568.4 million*

12/9

/201

4

12/1

6/20

14

12/2

3/20

14

12/3

0/20

14

1/6/

2015

1/13

/201

5

1/20

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2015

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5

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5

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5

3/31

/201

5

4/7/

2015

4/14

/201

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4/21

/201

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4/28

/201

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5/5/

2015

5/12

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5/19

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5/26

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5

6/2/

2015

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2015

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5

6/23

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5

6/30

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585

105

125

145

165

185

205

Australia65%

US35%95.6% 4.4% 7.8%

ACX ASX 200 ASX 300 Info. Tech.

Contact

Eddie GrieveSenior Manager, Listings & Issuer Services

02 9227 [email protected]

James PosnettManager, Listings Business Development


Rory CunninghamBusiness Development Manager


Thank you

Economy & Finance

Listing and Capital Raising in Australia