Just Retirement conducts IPO
British pension provider, Just Retirement, whose main business is providing financial assistance to retirees with health issues, had formalized its London listing, valued at GBP1.1 billion or USD1.8 billion on Tuesday.
The firm has the backing of private equity group Permira, priced the sale of the 30.5% stake at 225 pence per share, which was midrange for its initial pricing between 200 pence and 250 pence.
The company was previously listed in the junior Alternative Investment Market before its purchase by Permira funds in 2009. With this listing, the company was able to raise GBP300 million from the sale of new shares.
According to Just Retirement CEO Rodney Cook, "We are delighted investors have responded so positively to the strength of our differentiated business model and proprietary intellectual property. We look forward to executing our growth strategy as a listed company and bringing increasing value to our customers and shareholders as we introduce further innovation into the retirement income market."
The existing shareholders, including Just Retirement's management and Permira, would raise a total of GBP43.2 million for the share sale. This amount may increase further by another 15% if the overallotment option, where more stock can be sold if demand is strong, would be exercised. If the option is not exercised, then the funds managed by Permira would retain 62.4% shareholdings in the company.
The company's core business is to offer to retirees with serious health issues such as heart disease and emphysema annuities. These annuities would earn a higher income compared to conventional financial instruments.
Another aspect of the company's business is providing 'lifetime mortgage' products. These are used by pensioners to provide additional retirement income by unlocking part of the value of their individual homes.
The share sale conducted comes after rival Partnership Assurance had undertaken its own, rising by 9% in value since its June market debut.
Nomura and Deutsche Bank were engaged as joint global coordinators as well as bookmakers on the sale of the shares of Just Retirement. The share trading began at 0800 GMT.
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