Japan's Recruit Prices $2 Billion IPO At Top Of Range
Japan's largest recruitment company Recruit Holdings priced its initial public offering at 3,100 yen on Monday, the top of its bookbuilding range, showing confidence in investor demand for the $2 billion listing.
The range of 2,800 to 3,100 yen, set last week, had already suggested a more bullish stance than the initial indicative price of 2,800 yen.
The company's Oct. 16 listing, which will help Recruit to pay for future acquisitions as it expands overseas, will test investor demand for big Tokyo listings after several weak debuts earlier this year.
Some of the disappointing listings have reflected company-specific reasons, with Japan Display Inc's (6740.T) shares skidding 43 percent from their IPO price as investors fret about falling smartphone screen prices and its ability to compete with Asian rivals.
Investors have said Recruit may fare better due to a recent pickup in Tokyo shares as well as solid fundamentals.
Recruit, one of the world's top five staffing firms, is aiming to become the world's biggest by 2020. In 2013, it reported revenue of 1.2 trillion yen ($10.96 billion) and an EBITDA margin of 15.2 percent. Rival Adecco SA's (ADEN.VX) EBITDA margin is around 5 percent.
In recent years, Recruit has aggressively acquired overseas firms, seeking to offset a shrinking market in Japan where the population is rapidly aging. It has acquired U.S. staffing service CSI, Advantage Resourcing and Staffmark Holdings as well as Indeed.com.
Including an overallotment, the IPO is worth 213.82 billion yen ($1.95 billion) and values the company at 1.78 trillion yen.