Concepcion Industrial IPO set at P26 apiece

Leading local air-conditioning and refrigeration appliance maker Concepcion Industrial Corp. has priced its initial public offering at P26 per share, near the bottom of a previously indicated range, a stock exchange filing showed on Monday.

That means the company would raise P1.95 billion from the sale of 74.965 million shares, 85 percent of which are shares held by existing stockholders. There will be an overallotment option of up to 11.24 million shares that can be added to the total IPO size.

Concepcion Industrial last month was eyeing a range of P25.50 to P30.50 per share, which it said was equivalent to about 10.6 times to 12.5 times projected earnings for 2014. The valuation was said to be at par with other comparable firms in the region.

The exiting shareholders, meanwhile, were Concepcion Holdings Inc., Hy-Land Realty and Development Corp. and Horizons Realty.

Concepcion Industrial earlier said that the primary portion of the offering was smaller than the secondary portion because the company did not need fresh capital and had minimal debt.

Its growth would be hinged on an expanding middle class, which would spur demand for cooling solutions, coupled with the expansion of the housing and construction sectors.

In the last three years, the company has been growing its business at a compounded annual growth rate of 13 percent.  Moving forward, Concepcion Industrial plans to set an annual dividend policy equivalent to 30 percent of prior year’s earnings.

The domestic offering which will run from Nov. 13 to 21. The company expects to list on the PSE on Nov. 27.

Concepcion Industrial earlier tapped Maybank KimEng Securities Pte Ltd as the international underwriter and book runner. Maybank ATR-KimEng Capital Partners Inc. was assigned the domestic lead underwriter and issue manager.