Sharemarket floats tipped to rise this year

Local firms may pursue a dual listing on the NZX and ASX to tap into Australia's deeper pockets. Photo / Sarah Ivey

Chapman Tripp partner predicts plenty of action with investors able to pick from a wide range of sectors.

A partner with a top law firm says up to 20 sharemarket floats could take place this year.

Chapman Tripp, which advised on eight of the 12 NZX initial public offerings (IPOs) and main board listings last year, released its New Zealand Equity Capital Markets Trends and Insights report today.

Partner Roger Wallis said well-established companies from a diverse range of sectors were considering listing in the year ahead.

Although he could not name any of the potential issuers, he said demand appeared solid for both main board floats and listings on NZX's soon-to-launch NXT market, which is targeted at fast-growing firms valued at up to $100 million and will eventually replace the NZAX junior market.

"If you count the NXT market we could hit 20 listings, potentially [this year]," Wallis said.

That would beat the 16 main board and NZAX listings last year, adding $4.7 billion to New Zealand's equity market capitalisation. Last week, NZX chief executive Tim Bennett said demand for small and mid-sized initial public offerings (IPOs) was at a similar level to this time last year.

NZAX-listed Cooks Global Foods, the New Zealand franchisor of the Esquires cafe chain in markets outside Australasia, has already flagged its intention to float on NXT.

Other firms previously tipped to be considering listing on the new market include Auckland's Invivo Wines and technology developers Straker Translations, Fronde and Booktrack.

The Chapman Tripp report said "market chatter" suggested a number of technology businesses were exploring the possibility of carrying out IPOs in 2015 after a strong showing from that sector last year.

"Roll-ups, the acquisition and aggregation of private companies operating in the same market, seem likely given the warm reception they received in 2014," the report added.

New Zealand roll-ups that conducted IPOs last year included early childhood education provider Evolve Education Group, tertiary training operator Intueri Education Group and retirement firm Arvida Group.

Chapman Tripp said the trend of local firms pursuing dual listings on the NZX and ASX was likely to continue.

"Although listing on the ASX incurs extra fees and expenses and imposes additional compliance burdens, it improves access to Australia's deeper pool of capital and may provide greater liquidity." Orion Health, Vista Group, Intueri Education and Evolve were among the dual listings that occurred last year.

Read the Chapman Tripp report here: