Hirepool may be 'dusted off' for a trade sale after IPO plan shelved
Hirepool Group, the equipment rental firm majority owned by Tenby Powell and Sharon Hunter, may be headed for a trade sale after plans for an initial public offering two years ago failed to get enough support, according to a report by the Australian newspaper.
Australian private equity firm Next Capital in June 2014 abandoned plans to sell shares in Hirepool as part of a $262 million initial public offering after concern from institutional investors that on market support for shares of the unprofitable equipment rental company wouldn't be strong enough. It also shelved plans for a listing of its Australian-based On Site Rental Group.
However, the firm is understood to be "dusting off" its plans to sell the equipment hire businesses, with speculation Hirepool could be subject to a trade sale, the newspaper reported, without detailing its sources.
At the time of the planned IPO, Hirepool was projecting profits from 2015, after years of losses, having squeezed out costs since buying major rival Hirequip out of receivership the previous year and using its initial public offering to pay down debt, according to its prospectus. It had forecast a net profit of $25 million for the year to June 30, 2015, from a pro forma loss of $17.8 million in 2014, according to the company's prospectus at the time.
Following the merger, Hirepool became the nation's only generalist hire equipment company, although it has only about 19.6% of the market based on its previous application to the Commerce Commission to buy Hirequip. Those figures included an estimate that the building hire industry generated $780 million of equipment hire revenue in 2013 while Hirequip's revenue was $153 million.
Auckland-based Hirepool Group is 61% owned by Hunter Powell Investments, with 6% held by Next Capital, 1.9% by Australian investor Perpetual and 0.2% owned by Macquarie Investment Management, according to Companies Office records.