A consortium lead by the Commonwealth Bank of Australia has moved quickly to snap up the remains of an abandoned $2.2 billion ASX float of proptech giant Property Exchange Australia (PEXA).
PEXA, the nation’s only property transaction settlements exchange, had made an unsuccessful attempt to list the company in an IPO managed by brokers Macquarie Capital and Morgan Stanley.
The IPO would have valued the company between $1.88 billion to $2.18 billion, on a market capitalisation basis.
The float was officially cancelled in favour of a $1.6 billion buy-out after demand for stock from institutional investors fell short of expectations.
PEXA investors include the West Australian, Victorian and NSW governments, as well as a former Toll Holdings boss and former Essendon Football Club chairman Paul Little.
The e-conveyancing company, founded in 2010 as a single national electronic system for the settlement and lodgement of property transactions, has created a national network of over 150 financial institutions and 6,500 practitioner firms.
The company now accounts for more than half of all property settlements in Australia.
Both NSW and Victoria have mandated that all settlements will be online by July next year.
CBA along with Link Administration Holdings and Morgan Stanley Infrastructure Partners are now set to acquire PEXA, subject to a range of conditions.
The consortium already had an existing stake in PEXA, courtesy of Link and CBA’s existing holdings.
“Having been a key stakeholder in PEXA since its inception in 2011, today’s announcement represents our continued commitment to support the property industry as it transitions towards an innovative, fully digital, settlements process that aims to provide improved experiences for customers,” CBA chief executive Matt Comyn said.
Link said in a statement the deal remains subject to a range of conditions precedent, which are expected to take approximately two to three months to meet.
CBA will now add a further $50 million, totalling approximately $100 million invested in PEXA to date.
This will result in an increase of the bank’s ownership stake from 13.1 per cent to approximately 16 per cent.
Link’s shareholding will increase from its current level of 19.8 per cent to approximately 35 per cent.