AllHome narrows IPO price range

Tycoon Manuel Villar Jr.-led home improvement retailer AllHome Corp. has narrowed its initial public offering (IPO) guidance to a price range that suggests a maximum equity deal of P18.06 billion.

AllHome is planning to sell up to 1.29 billion common shares at P11.50 to P14 per share.

This range is based on a valuation of 20 to 25 times projected earnings for 2020, Wick Veloso, president of Philippine National Bank (PNB), said in a text message.

PNB’s investment house, PNB Capital and Investment Corp., is the domestic underwriters for this offering, while China Bank Capital Corp. is the domestic colead underwriter.

UBS AG Singapore acts as sole global coordinator and joint bookrunner while CLSA Ltd. and Credit Suisse (Singapore) Ltd. are the joint bookrunners.

Asked about AllHome’s main investment proposition, Veloso said this company had “all construction needs, fixtures, furniture and appliances in one roof, [thus] addresses ease of doing business.”

AllHome is seen to enjoy a captive market in affiliate mass housing developer Vista Land & Lifescapes Inc.’s property buyers.

The indicative price range for AllHome’s IPO has been trimmed from the maximum price of P16 per share stated in an earlier prospectus submitted to the Securities and Exchange Commission and the Philippine Stock Exchange (PSE).

At a valuation of 20 to 25 times projected earnings for 2020, AllHome’s pricing could be comparable to listed peer Wilcon Depot Inc., which is currently trading at 25 times projected earnings for next year.

For 2018, AllHome posted P511.4 million in net profit out of P7.19 billion in revenues.

In the first six months of the year, AllHome’s net profit rose by 293.3 percent year-on-year to P434.3 million while revenue was up by 66.9 percent to P5.05 billion, based on its latest prospectus.

The latest price guidance suggests an equity deal of at least P14.83 billion to as much as P18.06 billion. Pricing will be finalized on Sept. 27.

Incorporated in 2013, AllHome is a “one-stop shop” home improvement retailer that operates 25 stores with a total net selling space of 196,327 square meters across 20 cities and municipalities as of end-June. It plans to open up to 20 new stores in the second half of 2019 and another 25 in 2019.

AllHome will offer 750 million new common shares with 375 million secondary shares held by AllValue Holdings Corp., which has the option to offer 168.75 million more.

The offering will be on Sept. 30 to Oct. 4. Listing on the PSE’s main board under the trading symbol HOME will be on Oct. 10.

This equity deal will bring 34.5 percent of AllHome’s issued and outstanding capital stock to public hands. —DORIS DUMLAO-ABADILLA