Healthcare IPO injects confidence into equity markets

A major Australian firm’s advisory on the year’s biggest IPO to date is proof of renewed positive sentiment in equity capital markets, claims the lawyer advising the transaction

A major Australian firm’s advisory on the year’s biggest initial price offering (IPO) to date is proof of renewed confidence in equity capital markets, claims the lead lawyer advising the transaction.
Clayton Utz acted for Macquarie Capital as sole lead manager and underwriter in connection with aged care group Japara Healthcare's proposed $450 million plus IPO.
The Japara group owns and operates aged care facilities and retirement complexes for Australian residents and made the IPO announcement last Friday.
Under the proposed offer, Japara Healthcare plans to raise up to $450.4 million through the issue of up to 225.2 million shares at an indicative price of $2.00 each.
The transaction would value the company at approximately $525 million.
Clayton Utz corporate partner Brendan Groves is the lead partner advising Macquarie and said the IPO – the largest in the Australian market so far this year – reflected the renewed positive sentiment towards the equity capital markets, particularly in growth industries such as healthcare.
"It reflects what we expect will be a continuing trend this year of companies in active and strategically significant sectors such as healthcare capitalising on positive market sentiment to seek equity injections to support the strategic expansion of their businesses," Groves said.

The transaction marks an improvement in equity capital market sectors that have so far had a lacklustre year.
Last week, A Thomson Reuters report indicated that, so far, real estate transactions have taken the lion’s share of equity capital market (ECM) activity this quarter, while activity in many other markets is down.  

The report showed that the real estate sector accounted for 35% of total ECM transactions in the first quarter, generating proceeds worth almost $1 billion.
The total value of first quarter ECM was US$2.8 billion, a 26.4% drop on the same time last year, and 74% down on the final quarter of 2013.

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