So the Bln dollar evaluation, which some taunted when it was a darling, up in smoke..
The IPO issuing bank (namely MAQ Capital and UBS) nowhere to be seen, yet I engage all of the would-be investors of the future to look at (afr-pay wall) the glorious statement of the MAQ partner at the onset.. We were investing in a bright future.
The initial valuation was a dud, with combined T/O of the founders well under 20M. Assets nil except of course the magical goodwill..
But please read the fairy tale we were served, think how lunches were offered for no-one to check..
"Vocation Ltd is a roll-up of three companies in vocational education and training: AVANA, backed by Point Capital; CSIA, which provides front-line customer service training; and Melbourne-based BAWM, one of the largest privately owned education businesses in Australia. Macquarie Capital and UBS are joint lead managers on what will be a $200 million offer for a market capitalisation of at least $300 million. Fundies were told that while there’s plenty of scope for Vocation to expand via bolt-on acquisitions, its first couple of years will see growth concentrated on organic opportunities." If you feel like having a laugh, look at BAWM pre-IPO last 5 years FS and see what the largest privately owned education businesses in Australia turned-over..
Goodwill = were the "connections" the founders had cultivated with the education depts in Vic and NSW. Connections, which of course would become VET undoing.. Anything further would be defamatory.
But NOTHING lures more the IPO banks than public $$$ being offered. Remember the "Education Revolution"..
I cannot help but copy/paste a excerpt of an oct 2013 article afr " A few months ago, plenty of junior and mid-level corporate lawyers inside the big firms had never prepared a prospectus. How quickly things have changed. The offer documents are flowing thick and fast, with ASX debutantes Veda and Vocation the latest to land at the Australian Securities and Investments Commission. Education roll-up Vocation, which is chaired by former Treasurer John Dawkins, lodged its prospectus on Monday after securing commitments for 134 million shares at the $1.89 offer price."..
We were foretold " plenty of junior and mid-level corporate lawyers inside the big firms had never prepared a prospectus".. So let's not complain!
So let's put together 2 small size businesses with sector experience,
-front Barbie Ken the Surfer ( remember what business he was running beforehand? ... no...),
-reward handsomely the founders, who must have thought it was Xmas( +/- 40 M all up), for businesses. which real combined value would have been top 1/4,
-call the institutional investors first then the retail ones and sell them the dream of never ending public $$$ rolling into the sector, with a market preferences for VET due to their "connections" with the industry.
The opportunity cost... well ANYTHING would have been better, even the big miners, in spite of the drop, would have been better.
In the meantime, issuing banks went to better pasture (would love to know where is the MAQ partner now? The founders, have protected their assets.. UBS is licking its wounds and us retail are swearing ( but of too late) that we will not be taken for a ride again.. But of course we will..
The VET saga should be investigated properly. From the initial IPO prospectus to every announcements made from Aug 2014 but it won't because simply-put taking a sucker money has never been a crime.
Hope some money money, we did on one of the swing but by far still red at the end.
