Mercedes Ruehl Reporter

Mercedes writes for The Australian Financial Review and BRW from the Sydney newsroom. She has an interest in technology, politics and travel writing.

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OzSale looks on track for IPO

Published 12 June 2013 11:19, Updated 13 June 2013 06:37

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Daily deals website boss Carl Jackson may literally be floating on the success of the site’s frenzy sale in May, where it recorded $5 million in revenue in just two days. New reports suggest the online retailer is on track to publicly list in the second half of the year.

OzSale’s Carl Jackson says a float has always been the company’s preferred exit.

Jackson told BRW in January that an initial public offering was always the “preferred exit”.

Now, following a boost in sales – thanks in part to the frenzy sale – and a pre-IPO round of funding, sources have told The Australian Financial Review’s Street Talk column Jackson has given the go-ahead to a float which has an indicative market capitalisation of between $150 million and $200 million.

OzSale’s parent entity, APAC Sale Group, enlisted Macquarie Capital in April 2012 to show the company to fund managers and provide an exit for existing minority stakeholders. Jackson’s brother Jamie Jackson is chairman of APAC and OzSale’s founder.

OzSale, essentially a shopping club of about 8 million members, is one of many Australian online deals sites to receive funding by venture capitalists or a big-name investor. It received $14.5 million several years after starting up in 2006 from Insight Partners – also known for their early investment in Twitter. The site now ships over 15,000 orders a day.

Online site Deals Direct gained some powerful backers after starting up in 2004, one being Ellerston Capital, a specialist funds manager and subsidiary of CPH, the Packer family holding company. James Packer also bought into CatchoftheDay, another popular deals website. Investments by high-profile players like Packer have significantly increased interest in online retail businesses in the last few years.

But Street Talk says one concern fund managers might have for a public listing is that brandsExlusive, another members-only deals site, had to make write-downs only a few months ago.

But even brandsExclusive, founded by Daniel Jarosch, is not doing too poorly. In fact, it’s profitable. The company topped BRW’s Fast Starters list this year with revenue of $56.7 million and growth of 82 per cent in the last 12 months. APN News & Media, which acquired a majority stake in the site in 2012, noted in its end-of-year report in January that brandsExclusive had contributed to revenue gains.

Still, it’s a tough time for retailers and fund managers may not want to touch this space for now. Deutsche Bank this week revealed that growth in discretionary spending is close to recessionary levels at below 2 per cent. Consumer spending growth in general has dropped below trend as well.