Jim Bindon discusses Big River ahead of its IPO
Big River Industries Ltd (ASX: BRI) has established itself as a diverse manufacturer and distributor of timber and building products. Its subsidiary, Big River Group Pty Ltd, was incorporated in 1920 by the Pidcock family, and is a major Australian distributor of its own in-house manufactured and branded timber products and a range of associated building products sourced from domestic and international manufacturers and suppliers.
The Company generates strong cashflows, with pro forma revenue of $195.2 million and EBITDA of $11.3 million in FY2016, forecast to grow to $207.3m revenue and $12.8m EBITDA in FY2108. A fully franked dividend of 5.4% is forecast for FY2018.
Big River generates revenue from the sale of timber and building products through its national network of 12 sales and distribution centres which cover all major capital cities. It has a diversified customer base of over 2,700 client accounts, with its top 10 customers representing approximately 16% of revenue for FY2016.
It sells directly to professional builders, formworkers, construction companies and building contractors that service the residential, commercial, civil and infrastructure construction markets. Its vertically integrated business enables it to maintain supply of competitively priced, high quality products to its customers through a strong culture of cost and quality control.
Big River has successfully completed 5 acquisitions over the last 10 years which have contributed significantly to the successful growth of the Company. Management has identified a number of attractive merger and bolt-on acquisition opportunities, and has an available debt facility of $34 million to funds its growth.
Big River is looking to raise $17 million and the offer is fully underwritten by Taylor Collison Limited. Big River will have an indicative market cap of $76.8 million.