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Hirepool IPO

16 June 2014

Hirepool IPO

Hirepool Group Limited (Hirepool or the Company) today registered a prospectus to raise between $175 million and $262 million and seek a listing on the NZX Main Board and ASX.

The Offer comprises the issue of up to 120.1 million new ordinary shares to raise approximately $135 million of new capital and the sale of up to 83.5 million existing shares. The indicative price range of the shares in the Offer will be $1.10 to $1.50 per share. The Offer will consist of a Broker Firm Offer and an Institutional Offer.

Capital raised through the issue of new shares will be used to pay down Hirepool’s existing debt, purchase shares in a partially (but majority owned subsidiary) of Hirepool, and pay costs associated with the Offer. The Offer will also allow some long-term existing shareholders to sell down shares. Following allotment, existing shareholder Next Capital and its co-investors will continue to own between 20% to 35% of the Company’s ordinary shares.

The final pricing of the Offer will be determined on 24 June 2014 by means of a bookbuild to institutions and retail brokers.

Hirepool Chairman Emmet Hobbs says the IPO will allow the Company to capitalise on growth in New Zealand economy and in particular the construction, infrastructure and maintenance sectors which generate nearly half Hirepool’s revenues.

“The merger of Hirepool and Hirequip last year has created a more efficient business with a better platform to invest in new high yielding product offerings, complementary acquisitions and achieve more efficient fleet management through the use of our new IT and reporting systems.”

Hirepool is a well-known brand in the hire industry with 58 branches nationwide serving a range of customers including household do-it-yourself, builders, contractors, function organisers, resource and energy industries, large infrastructure projects and industrial users. Large customers, with accounts greater than $100,000 per annum, make up 44 per cent of Hirepool’s revenues which are projected to total $140.6 million in the current financial year to 30 June 2014 and grow to $155.6 million in 2015. On a pro-forma basis, Hirepool's earnings before interest, tax, depreciation and amortisation, (EBITDA) for the current financial year are projected to be $46 million, accelerating to $60 million in financial year 2015.

Hirepool CEO Brian Stephen says the business is now positioned to capitalise on growth in the economy and the step-up in the number of major infrastructure and construction projects now underway or about to begin shortly. Nineteen major projects are expected to be in the construction phase in the 2015 financial year, including Roads of National Importance for the New Zealand Transport Agency, the Sky City Convention Centre and key sites in the Christchurch re-build.

“Feedback from several of our major customers indicates a desire to increase their own fleet flexibility by making greater use of hire equipment as they focus on their core competencies or choose to allocate capital to other priorities. This provides Hirepool the opportunity to deepen its relationship with these customers.”

Hirepool expects to begin trading on the NZX Main Board and ASX on 11 July 2014 with the ticker code HIR. Investors who are interested in finding out more about the Offer or receiving an Investment Statement are encouraged to go to www.hirepoolshares.co.nz and to contact their broker prior to 24 June 2014.

Key dates
Prospectus registration: 16 June 2014
Bookbuild, Pricing and Allocation: 24 June 2014
Broker Firm Offer Opening Date: 25 June 2014
Broker Firm Offer Closing Date: 8 July 2014
Expected commencement of trading on the NZX Main Board and ASX: 11 July 2014

Deutsche Craigs Limited, Macquarie Securities (NZ) Limited and UBS New Zealand Limited are the Joint Lead Managers, and ANZ Bank NZ Limited is the Co-Manager, for the Offer. There will be no public pool. Interested parties should contact the Joint Lead Managers, the Co-Manager, their broker or financial adviser for information and advice.

No person guarantees the Offer shares nor warrants or guarantees their performance. Specifically, none of the Next Capital Shareholders, Hunter Powell Investments, the Macquarie Shareholders nor any other Shareholder of Hirepool (each term as defined in the prospectus) guarantees or undertakes any liability in respect of the Offer shares.

ENDS

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