TPG Capital Management, which is a private equity firm managing $70 billion, is set to ride high with floats of two major businesses, Ingham’s Enterprises Pty and utility Alinta Energy Holdings Ltd. The former is considered a major initial public offering this year while the latter offering could boost the local market. Alinta’s IPO is expected to help raise over $2 billion, while Ingham’s is forecasted to have a market capitalisation of between $1.3 billion and $1.5 billion.
 

Offer Statistics (Source: Company Prospectus)
 
Sale of Ingham's stake by TPG Capital: TPG Capital would offload a stake in the range of 50% and 70% of Ingham’s in the IPO, at an indicative price range of $3.57-$4.14 a share. Further, Ingham’s is set to trade on a pro forma price to earnings multiple of 13.5 times to 15.5 times while the offer includes the sale of up to 45.2 million new shares. After selling said percentage of stake, TPG would still have over 25% to 40% stake in the company.
 
Good Profit for TPG Capital: In case the high-end guidance is considered, the partial sale of the current shares would generate over $950 million. The group had bought the whole stake in the firm in 2013 for about $880 million. Thus, the move indicates for strong returns to the group from the investment in the Ingham.
 
Strongly positioned in Australia’s largest poultry segment: The Australian exports have been said to include only a small percentage of chicken and turkey each year, indicating a strong position due to the growth in the domestic consumption, leading Ingham’s to make good profits in such scenario. Moreover, there has been a growth of 4.1% per year in the chicken consumption between 1990 and 2015, primarily due to the consumer preferences and demand for food. Additionally, the outlook for poultry in Australia has also been strengthened due to the compressed supplies of beef as witnessed recently. The alternative, chicken, has seen a rise in demand therefore. It is also worth noting that Ingham’s key customers seem to include big names as KFC and Woolworths, which account for a good percentage of Ingham’s sales revenue. Although revenue growth has been said to be little sluggish for the company, capability to have good cash generation and a strong position in the industry seem to be other brownie points for Ingham’s. Further, Ingham’s FY16 pro forma EBITDA was $167.5 million and is forecast to increase by 13.5% to $190.1 million in FY17, at the back of organic growth and efficiency initiatives.
 
Well positioned to withstand Australia's strict biosecurity laws: Australia follows strict biosecurity laws which make it difficult for many companies to import poultry. These barriers make Ingham’s position even strong and are expected to help generate better shareholder value.

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