Electronic conveyancing business PEXA is moving towards a sale which may see four state governments pocket over $350 million.
If the sale goes through it could stand to be one of the biggest initial public offerings in 2018.
Late last year the business identified a 12-month window, starting in September 2017, to explore strategic options ahead of a potential 2018 float.
Now the company is waiting on the outcome of a dual track process which will see trade buyers pitted against the price achievable from a sale to institutions and retail investors.
The sale would come at a great time for PEXA, transactions through the platform have been steadily rising, resulting in 80,000 property settlements in March 2018, compared to just 45,000 five months earlier.
According to the Financial Review, predicted buyers are operators of stock exchanges, private equity and those attracted to infrastructure style assets.
Global real estate firms are also tipped to be keen on the platform.
PEXA is currently owned by the NSW, Victoria, Queensland and Western Australian governments, alongside the big four banks, Macquarie Group, Link Group and Paul Little. A sale would result in a minimum $350 million payment for the four governments.
It’s said that the PEXA software would have cost in the region of $120 million to develop.
PEXA is regulated by the Australian Registrars’ National Electronic Conveyancing Council, but there have been concerns raised recently that this isn’t enough. PEXA’s position in the marketplace as a monopoly could allow it to exploit its role and there is a push for heavier regulation.
It is anticipated that these concerns will form a vital part of the IPO prospectus.
The company opened in 2013 and has since processed approximately $100 billion in property settlements. In the states where PEXA operates, 95 per cent of property refinances are completed electronically.
Chief executive Marcus Price has been investment in value adding software for customers conducting electronic transactions. These applications can be integrated with the PEXA e-conveyancing system, further extending the company’s reach.