Australia's Flexirent to raise A$265 mln in IPO-source

SYDNEY, Nov 21 (Reuters) Australian financial services company Flexirent Holdings Pty. Ltd. plans to raise A$265 million ($204 million) in an initial public offering (IPO), valuing the it at A$435 million, a banking source told Reuters on Tuesday.

The draft prospectus for the proposed offer is expected later on Tuesday, the source said, with the shares expected to be sold at A$2.00 each.

Flexirent is expected to start trading on Dec. 12, the source added.

The group's founders had originally planned to either sell the company to a trade buyer or list. They appointed Goldman Sachs JBWere in April to study a possible share market listing.

''They had two strong offers and the vendors decided to IPO in the interest of where they wanted to take the business,'' the source added.

The funds raised would be partly used for future growth and to give an exit opportunity to the existing shareholders.

The company provides point-of-sale finance for small computer and electrical equipment purchases and rental in Australia and New Zealand.

The founders are expected to hold about 30 percent equity following the offer, the source added.

Flexirent founder Andrew Abercrombie would be the single-biggest shareholder, holding between 25-30 percent of the company after the float.

Another founder David Berkman is expected to retain under 5 percent shareholding in the company.

The company with more than 325,000 customers and 300 employees, started operations as Berkman Capital Finance Pty. Ltd. in 1988. It commenced short-term rentals on facsimile machines from Japan's Mitsui Corp.

Flexirent is being at offered at price-to-earnings ratio of about 15.8 for fiscal 2007, marginally higher than the P/E of the benchmark S&P/ASX 200 Index <.axjo> which trades at about 15.

PRIVATE EQUITY BOOM Private equity funds Pacific Equity Partners and Ironbridge Capital were in the race to acquire to Flexirent, another source familiar with the transaction said.

Private equity investors have poured about US$11.2 billion into Australian companies this year so far, up dramatically from US$609 million for the full of 2002, according to data compiler Thomson Financial.

And that excludes Kohlberg Kravis Roberts' [KKR.UL] $3.1 billion deal announced with Seven Network Ltd. on Monday.

A record high stock market has also encouraged corporates to come to market in droves, raising US$20.8 billion through IPOs and secondary share sales so far this year, Thomson data showed.

Including the US$11.9 billion garnered by Telstra Corp Ltd.

, the total capital raising would set a record this year, outpacing the previous record of US$26.02 billion set last year.

REUTERS DKS PM0530