17 Jun 2014

Hirepool says it's ready to capitalise

7:23 am on 17 June 2014

Hirepool is positioned to capitalise on growth in the economy and the increase in major infrastructure and construction projects nationwide, chief executive Brian Stephen says.

Hirepool has registered a prospectus to raise $175 million-$262 million and will list on both the New Zealand and Australian stock exchanges.

The shares will be priced between $1.10 and $1.50, with the actual price to be determined on 24 June through an auction process with institutional investors.

Private equity firm Next Capital, which owns Hirepool, will continue to own at least 20 percent of it after the share sale.

Mr Stephen said Hirepool's merger with Hirequip last year provided a great opportunity for the business to achieve further growth, which would come in two of three forms.

That included organic growth, driven through product extensions, some additional cost savings and driving better efficiencies.

As well, there were bolt-on extensions and mergers the company was looking at, and which it would continue to focus on during the next 12-18 months.

"Hirepool is a household brand name. It's been around for 60-odd years," Mr Stephen said.

"What gives us confidence that we can achieve that additional rental penetration is management's view of the low rental penetration rate in New Zealand, which we believe is around 30 percent compared to numbers that are coming out of the US at 55 and the UK at 65 percent.

"So a huge opportunity to get in there and grow the business and put more volume through the existing overhead structure."

Hirepool expected to begin trading on the NZX Main Board and ASX on 11 July.