Public shunned ​in Kogan IPO to raise AU$50m

Kogan.com is expected to offer new shares at AU$1.80 per share through an institutional offer, broker firm offer, priority offer, and an employee offer.

Australian ecommerce retailer Kogan.com has launched an initial public offering (IPO) to raise AU$50 million, as part of plans to list on the Australian Stock Exchange on June 30, 2016 at a market capitalisation of AU$168 million.

The company is offering new shares at an offer price of AU$1.80 per share. However, there will be no general public offer. Instead, there will be an institutional offer, broker firm offer, priority offer, and an employee offer.

The company said the majority of the raised funds will be used for growth capital, including investment in new products and categories, as well as marketing.

Specifically this will include growth into new verticals with Kogan Travel and Kogan Mobile; further integration of the Dick Smith online assets, which the company acquired in April 2016; the expansion of Kogan.com's higher-margin product ranges, including its private label and domestic third-party branded products; and continual increase of website traffic and purchase frequency.

As part of the move, founder and CEO Ruslan Kogan, and COO and CFO David Shafer, who are existing shareholders, will hold on to their 69.2 percent share of Kogan.com and will enter into voluntary escrow agreements, the company said.

In a letter to investors, Kogan said the growth and success of the business so far is a testament of the future of Kogan.com, noting it will be the first time the company will have external equity funding.

"Our goal is to make in-demand products and services more affordable and accessible. We want to ensure that everyone who invests in Kogan.com and becomes a part of our story believes in our mission, learns about what makes us tick, and understands why we have had 52 million visits to Kogan.com's core website channels in the past 12 months," he said.

Kogan.com has also appointed Greg Ridder as non-executive chairman and Harry Debney as non-executive director.

Looking forward, the company has forecast FY2017 revenue will be AU$241.2 million, while earnings before interest, tax, depreciation, and amortisation will come in at AU$6.9 million.

The retailer has, however, noted that Dick Smith forecasts are not included in the prospectus forecasts due to its limited trading history under the Kogan brand.

Kogan announced it was going to save Dick Smith's online retail business in March, after Dick Smith entered into voluntary administration in early January.

Kogan said his company was going to build on the Dick Smith legacy.

"I remember as a kid always visiting Dick Smith to look for parts to upgrade my computer. There is a strong history of passion in the Dick Smith community for how technology can improve our lives, and we look forward to helping make it more affordable and accessible for all," he said.

Kogan.com first hinted at plans that it will launch an IPO at the end of May.

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