Adrad Case Study

Background

• • Founded in 1985, Adrad Holdings Limited (Adrad or the Company) is an Australian-based business specialising in the design and manufacture of innovative heat transfer solutions for OE customers globally and the manufacture, importation and distribution of automotive parts for the aftermarket in Australia and New Zealand

• • Headquartered in Beverley, South Australia with ~500 employees, Adrad has an established network of branches, workshops and manufacturing facilities across 8 main sites and 16 warehouses in Australia, New Zealand and Thailand

• • The Founders of Adrad engaged us to explore a range of options for them to realise value from the Company over time

Our role

• • In early 2021, AE organised a preliminary non-deal roadshow to obtain interest and feedback from the Australian investor universe including a range of private equity funds, institutional investors and stockbroking firms
    • • From the roadshow, it was evident that interest in Adrad was highest from institutional investors and an IPO on the ASX was likely to deliver the best valuation outcome for the Founders
    • • Given the growth prospects of Adrad, an IPO was also more attractive to the Founders as it allowed them to retain a material ownership interest and share in the future success of the Company

• • During 2021, we advised on an initial Pre-IPO capital raise in parallel with a corporate restructure to ensure the Company was IPO ready
    • • The Pre-IPO capital raise of $20m provided (1) interim growth capital, (2) a partial selldown for the Founders and (3) establish a suitable register of institutional investors in advance of the IPO process
    • • This raise was led by cornerstone investors including Ellerston Capital, Perennial and Washington H Soul Pattinson

• • IPO process commencing in early 2022, where AE’s role included:
    • • Independent Corporate Advisor to the Company and overall project management of the transaction
    • • Advised on the most effective way to communicate the financial performance of the Company and the strategy
    • • Assisting the Company in engaging its legal advisor as well as joint lead managers and underwriters (Morgans and Bell Potter) – this role included negotiating the optimal fee outcome of the Company
    • • Assisting in the preparation of offer documents including the Prospectus and Investor Presentations
    • • Participation in due diligence committee meetings
    • • Provision of valuation advice (in conjunction with the joint lead managers) and financial modelling for the transaction
    • • Assisting the Company in the identification and appointment of Directors

Outcomes

• • Maximise valuation for the Company as an independent advisor

• • Adrad successfully completed a $20m Pre-IPO raise in December 2021 and raised a further $22m through the IPO on the ASX in September 2022

• • AE maximised value for the Founders by successfully managing communications and expectations of institutional investors throughout the Pre-IPO and IPO process

• • Working collaboratively with the Company’s legal and accounting advisors, ensured the successful transition of Adrad from a private, family owned business to becoming IPO ready

• • Realised a $17m selldown for the Founders across the Pre-IPO and IPO transactions, with them retaining a 61.2% shareholding at IPO