Did the Private Equity company owning Spotless raid the piggy bank on the way to the sale?

Just been looking into the financial report behind Spotless. Found two interesting items that happened in late November 2013, before it was floated.

We have this (on page 14)

paid $301.5 million in a return of capital to shareholders on the 22nd of November 2013 (0.477 per share)

We have this (on page 15)

paid $148.5 million in dividends to shareholders on the 22nd of November 2013 (0.2359 per share)

All this before float mind you.

That's a cash out of $450 million to PE shareholders. (Private Equity Partners)

Then you have the sale

$1.60 offer price, 596,000,000 shares offered - Revenue of $953.6 million to PE shareholders (Private Equity Partners)

Grand total to PE of $1.4 billion

PEP spent $723 million in taking it private in 2012, assume 10% restructuring costs a year ($71.3*2 = $142.6 million)

So Net Investment = $865.6 million over two years

Net Return to PEP = $534.4 million

ROE per year (compounding) : 27.2% a year.

Not bad when you consider the ASX200 over those two years (including dividends) was around 15.64% a year.

Those PE guys know how to make a buck. Pity about the current shareholders however who start their journey with $450 million less in liquid capital.