Electronic Chain Dick Smith Expects to Raise $344 M in December IPO

YouTube/Bob Coles

Anchorage Capital Partners, the new owners of electronics retailer Dick Smith, is publicly listing the company and targeting $344 million for the initial public offering (IPO). They announced the IPO on Thursday afternoon.

They purchased Dick Smith at a bargain initial price of only $20 million in 2012 from grocery giant Woolworths. The sale includes Woolworths giving up its right to a part of float proceeds in exchange for a $74 million payment the early part of 2013.

Former Myer executive Nick Abboud, the CEO and managing director of Dick Smith, said the retail store is ripe for an IPO after a change in consumer sentiment and general trading condition in consumer electronics.

He explained at the IPO launch, quoted by The Sydney Morning Herald, "The electronics industry is coming out of several years of deflation and coming into some positive headwinds."

"And so if you look at there is some inflation coming back into the category, you have got launch of Play Station 4 in December, the digital change over for TVs for Victoria and New South Wales, that's happening over next few months," Mr Abboud added.

The IPO would sell about 65 per cent of Dick Smith to the public at $2.20 per share. It begins Nov 22 and will close at Dec 2, while Dick Smith stock will start to trade at the ASX on Dec 12.

The remaining 35 per cent of Dick Smith will be divided among Anchorage (20 per cent), Dick Smith management (10 per cent) and Mr Abboud (6.5 per cent).

Under Anchorage's management, Dick Smith logged a net profit in 2012 of a little below $7 million and forecasts a profit of $40 million by 2014 and sales of $1.226 billion.