1. JANUARY 2017
Australian IPO Activity in 2016
Including analysis of RTO activities
IPOWatch Australia
Great people, great resultshlb.com.au

2. www.hlb.com.au
For further information
Perth
Marcus Ohm
+61 8 9267 3225
mohm@hlbwa.com.au
Gold Coast
Janelle Manders
+61 7 5574 0922
jmanders@hlbgc.com.au
Melbourne
Jude Lau
+61 3 9606 3888
jlau@hlbvic.com.au
Adelaide
Corey McGowan
+61 8 8133 5030
cmcgowan@hlbsa.com.au
Brisbane (HLB Chessboard)
Peter Bishop
+61 7 3001 8870
pbishop@hlbchessboard.com.au
Sydney
Simon James
+61 2 9020 4000
sjames@hlbnsw.com.au
Wollongong
Ben Fock
+61 2 4254 6500
bfock@hlbw.com.au
Overview....................................................................1
IPO activity by quarter..............................................2
The road ahead.........................................................2
IPOs by market capitalisation..................................3
Sector analysis..........................................................4
IPO subscription rates..............................................5
Share price performance.........................................6
Case Study –VEEM Limited.....................................7
Reverse takeovers (RTOs) overview.......................8
Amendments to ASX listing rules...........................9
RTOs overview – an analysis.................................10
RTOs by market capitalisation............................... 11
RTOs by industry sector.........................................12
Contents
Disclaimer – The analysis presented on pages 1 to 6
within this report relates to all initial public offerings that
have resulted in the listing of an entity’s securities on the
Australian Securities Exchange (“ASX”) with the exception
of compliance and “backdoor” listings and offers of non-
equity securities.
The data presented on reverse takeovers on pages 10 to
12 includes all ASX recompliance listings, excluding those
which did not include significant changes in ownership and/
or management.
The term “small cap” is used to refer to companies with
a market capitalisation of no more than $100 million. All
analysis by reference to market capitalisation on listing is
based on the price at which new securities were issued.
Whilst every care has been taken to ensure the accuracy of
information contained in this report, we accept no liability
for any error or omission, nor for any action taken in reliance
on any statement or opinion in this report.
No statement or opinion in this report is intended to be
construed as investment advice. Properly considered
professional advice should always be sought if in doubt
regarding the merits of any investment.
No part of this publication may be reproduced, in
whole or in part, without the prior written consent of
HLB Mann Judd.
© 2017 HLB Mann Judd Australasian Association

3. 1Great people, great results
2016 was a year of continued improvement in
the IPO market.There were a total of 94 new
IPOs on the ASX during 2016 which was an
11% increase over the previous year when 85
companies listed on the market and a marked
improvement on the previous 5-year average
of 72 listings.
The total funds raised increased slightly in
2016 at $7.50 billion raised which represents
an increase of 7% on the 2015 total of $7.02
billion, despite the increased number of small
cap companies listing in 2016 and lower
associated capital raisings.The total raised also
compares favourably with the previous 5-year
average of $7.24 billion which was significantly
inflated by the record set in 2014 of $16.70
billion, a figure that was impacted by several
large listings.
Whereas large listings had previously
dominated the statistics in the period since the
IPO market cooled, the activity in both 2016
and 2015 was more balanced in terms of both
market capitalisations and industry spread.
In 2016, an increasing proportion of the
IPO market was made up of smaller cap
companies.The number of new small cap
market entrants increased significantly during
2016, with a total of 64 entities with a market
cap less than $100 million completing their
IPOs during the year.This represents a solid
increase of 33% over 2015’s 48 small cap
listings and over the previous 5-year average of
49 listings.
In terms of funds raised by small caps, there
was consistency with previous years with
small caps raising $828.51 million in 2016, or
11% of the total funds raised of $7.50 billion,
which compares to the total in 2015 of $827.59
million (or 17% of the total funds raised in
that year). Average funds raised by small caps
decreased to $12.95 million in 2016 from the
previous year total of $17.24 million. Whilst it is
positive to note the increasing contribution to
the number of listings by small cap companies,
it remains substantially short compared to
2012 when 93% of all listings were from
entities with sub-$100 million market caps.
With respect to the largest cap companies
listing during the year, a total of three
entities listed during the year with a market
capitalisation of over $1 billion.These listings
contributed a total of $2.43 billion to the total
funds raised during the year or 32% of the
total.This was a significant increase over
2015, when the two very large entities listing
contributed 19% of the total, or $1.33 billion.
At the other end of the scale, the smallest
market entrants (those with a market cap
below $10 million) saw four successful listings
in 2016 compared to just a single listing in
2015 and two new listings in 2014. These very
small listings contributed only $17 million to
the total funds raised and represented the
Materials, Retailing and Food, Beverage &
Tobacco industries. Historically, this segment
has been represented by junior miners and the
shift in representation highlights poor levels of
investor sentiment in the Materials and Energy
sectors over recent years. In 2016, there
was an increase in the number of Materials
companies listing which were more evenly
spread across all market capitalisation ranges.
The trend which emerged in the previous
year, of increasing diversification in IPOs
across industries, continued in 2016 with 20
industry groups represented compared to 21
in 2015, and an average of 17 in the previous
three years.The technology and biotech
sectors were again well represented with
Software & Services (21), Pharmaceuticals &
Biotechnology (six) andTechnology Hardware
& Equipment (two) comprising 31% of all
new listings during the year. Materials stocks
performed much better in 2016 with a total
of 12 listings compared to only three in the
previous year. Energy stocks unfortunately
continued to be under-represented, with only
a single listing during the year. Other notable
market segments included Food, Beverage &
Tobacco and Real Estate with seven listings
each.
In a marker of improving investor sentiment
towards the IPO market, subscription rates
for IPOs increased significantly during 2016
relative to previous years, with 83% of all new
listings meeting or exceeding their subscription
targets. In total, new IPOs obtained 102%
of the total funds being sought raising $7.50
billion.This is a positive step from 2015 and
2014, when only 68% and 65% of companies
respectively were able to meet their funding
targets.
Whereas in previous years, small cap
companies have struggled to meet their
subscription targets, subscription rates in
2016 were relatively well spread across all
market capitalisation brackets. The smallest
companies (<$10 million market capitalisation)
performed well with all four of the new
listings achieving their targets with an average
oversubscription of 21%.Those entities with
a market cap between $10 million and $25
million and those over $100 million were
also oversubscribed on average.The poorest
performing segment was the $50 million to
$75 million market cap entities, of which only
57% of companies achieved their target, with
an average subscription rate of 69% of total
funds sought.
Share performance of new listings was
positive overall relative to the wider market.
New listings within the small cap sector
recorded an average first day share price
increase of 12%, and across all capitalisations
an average gain of 8%. A total of 49 new
listings, or 52% of all IPOs during 2016, ended
their first day above their listing price.
In terms of year end share price gains, new
listings again outperformed the wider market
in 2016, with an average increase in share
price of 16% across all new IPOs and 22%
specifically within the small cap sector.This
compares well against the ASX 200, which still
recorded a solid increase of 7%.
Overview
Small cap IPO market continues to improve
Marcus Ohm
Partner
Corporate &
Audit Services
Perth
3
5 5
7
5
9
8
10
4
10
12
16
-
2
4
6
8
10
12
14
16
18
-
1,000.00
2,000.00
3,000.00
4,000.00
5,000.00
6,000.00
7,000.00
8,000.00
January February March April May June July August September October November December
NumberofNewIssues
CumulativeFundraising($m)
Number of Listings (RHS) Cumulative Small Cap Fundraising (LHS) Cumulative Large Cap Fundraising (LHS) Cumulative Total Fundraising (LHS)

4. 2 www.hlb.com.au
2017 is poised to be a stronger year for IPOs, especially in the
Materials sector, if the upcoming listings are representative of things
to come. At the open to the year, 23 companies have applied for
listing to the ASX, which represents an increase of 15% over the
same time last year.These new entrants are seeking to raise a total
of $206.60 million, which is marginally short of last year when the
total was $208.30 million.
The recovery in the Materials sector looks set to continue next
year with a total of 11 explorers, miners and associated businesses
waiting to list.This is a significant improvement over the previous
year, when there were only four planned listings in these sectors
which sought to raise $15.30 million.These are generally smaller
listings seeking a total of $70.00 million, with most seeking to raise
between $3.50 and $4.00 million. A significant portion of these are
focused on lithium and cobalt, in a sign of the continuing push for
materials used in the creation of energy cells.
The largest planned listing is that of India Fund Limited, an
investment company seeking to invest funds in Indian listed
companies.This company is seeking to raise $50.00 million,
approximately one-quarter of all the funds in the pipeline.
Real Estate stocks also contribute significantly to the total funds
sought, with two planned listings looking to raise $30.00 million.
At the same time last year, technology and biotechnology stocks
featured heavily which reflected in the results for the year. At
that time, seven planned listings were seeking $68.50 million.
By comparison, only one technology company is awaiting listing,
seeking $5.00 million. Also prominent in the results from last year
were Agriculture stocks, which contrasts with this year, with only
two planned listings totalling $7.10 million.
The road ahead...
In recent years, the December quarter has
been the best performing quarter in terms of
number of listings and 2016 was no exception
to this trend.The ‘rush-to-market’ phenomenon
in the final quarter of the year has been evident
over recent years and the impact of this was
significant in 2016.
As with previous years, the first quarter of
2016 was relatively subdued with only 13
companies listing. Of the companies listing
during the first quarter, a total of 11 were small
caps which impacted significantly on the total
funds raised during the quarter which was
only 2% of total funds raised for the year.The
March and June quarter listings performed
well from a share price perspective, however,
recording average price increases of 31% and
36% respectively which compares favourably
to the average increase for the year of 16%.
The June and September quarters performed
better than March, with a total of 21 and 22
listings respectively.These two quarters also
contributed in a similar manner to the total
funds raised for the year with the September
quarter totalling $2.26 billion and the June
quarter seeing $2.40 billion raised.
The December quarter experienced a
significant increase in the number of
companies listing with a total of 38 new
floats occurring in the final quarter of the
year or 40% of the total listings for the year.
The contribution of small cap companies was
notable in the quarter with 27 listings (or 42%
of new entrants for the quarter) being small
caps.This compares to 12 listings in the June
quarter and 14 in the September quarter.
These quarters contributed $195.57 million
and $180.74 million respectively of total funds
raised by small caps.
This trend is consistent to the previous year
where 19 small cap listings out of 48 also
occurred in the final quarter.The final quarter of
2016 also contributed 46% of the total funds
raised by small caps during the year with a
total of $380.90 million raised.
It is likely that the final quarter was influenced
by the expectation of the recent ASX listing
rule changes which took effect during
December. As these changes mostly
impacted the smaller entities, it was notable
that 71% of all listings during this quarter were
from the small cap sector. Historically over
the previous five-year period, the quarter has
tended to have a larger composition of large
cap listings with less than half of the listings in
the December quarter in the 2015 year being
small caps.
IPO activity by quarter
A consistent pattern emerges
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
10
20
30
40
50
60
Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec
2012 2013 2014 2015 2016
AmountRaised($m)
NumberofIPOs
# of IPOs
>$100m
# of IPOs
<$100m
Amount
Raised ($m)
IPO Activity by Quarter

5. 3Great people, great results
Company Name
Amount
Raised ($m)
Market
Cap($m)
WGF WATERMARK GLOBAL LEADERS FUND LIMITED 91.08 91.08
MA1 MONASH ABSOLUTE INVESTMENT COMPANY LIMITED 52.47 52.47
MTO MOTORCYCLE HOLDINGS LIMITED 46.10 75.90
D2O DUXTON WATER LIMITED 41.70 70.36
4WD AUTOMOTIVE SOLUTIONS GROUP LTD 30.90 50.35
ATS AUSTRALIS OIL & GAS LIMITED 30.00 85.39
DN8 DREAMSCAPE NETWORKS LIMITED 25.00 86.00
9SP 9 SPOKES INTERNATIONAL LIMITED 25.00 80.59
SVH SILVER HERITAGE GROUP LIMITED 25.00 76.11
VEE VEEM LTD 25.00 65.00Capital Goods
Category
Consumer Services
Software & Services
Software & Services
Energy
Automobiles & Components
Utilities
Retailing
Investments
Investments
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
0
5
10
15
20
25
30
0 to 10 10 to 25 25 to 50 50 to 75 75 to 100
AmountRaised($m)
NumberofIPOs
Market Capitalisation on Listing ($m)
2015 Small Cap IPOs 2016 Small Cap IPOs Mean amount raised 2015 Mean amount raised 2016
Number of Small Cap IPOs by Market Capitalisation
IPOs by market capitalisation
Increasing contribution from small cap sector
The contribution of small cap companies
increased in 2016, continuing the trend of the
previous year. A total of 68% of all new listings
during 2016 were companies with a market
capitalisation upon listing of less than $100
million which was up from 56% in the previous
year and 43% in 2014.
There was a notable trend towards smaller
listings in 2016. Whereas in 2015, the most
active segment was the $25-50 million
bracket, which recorded 18 of the total 48
small cap listings (or 38%), only 27% of
all small cap listings in 2016 fell within this
bracket. Conversely, the $10-25 million market
capitalisation range had 28 out of a total of 64
small cap listings (or 44%).The larger number
of listings in this bracket contributed 24%
($198.41 million) to the total funds raised by
small caps at an average amount raised of
$7.09 million.
The $75-100 million bracket, as expected,
contributed the most to the total raised for
the year with $264.51 million out of $828.51
million total funds raised (or 32% of the total).
This bracket also recorded the highest average
funds raised for the year with $33.06 million,
similar to the previous year when the average
funds raised were $31.39 million.This bracket
contained only eight listings (or 13%) which
was similar to the $50-75 million bracket with
seven listings.The smallest cap companies
(<$10 million) recorded the least with four
listings.
The smaller market cap IPOs significantly
outperformed their larger counterparts with
respect to share price performance.The
smallest caps (<$10 million) recorded an
average day one gain of 65%, and finished the
year in positive territory by 52% on average.
The $10-25 million bracket was the best
performing overall, however, with average
day-one gains of 27% and an average year-end
gain of 56%.
Largest IPOs within Small Cap Segment in 2016

6. 4 www.hlb.com.au
A total of 20 different industry sectors were
represented in 2016, continuing the trend
of both 2015 and 2014 which had 21 and
17 sectors respectively. The most well
represented sectors were Software & Services
(21 listings) and Materials (12 listings) which
comprised a total of 35% of all new listings
during the year.
Looking at the small cap sector specifically,
technology and biotechnology listings were
well-represented, with Software & Services
recording 16 listings (25%), Pharmaceuticals
& Biotechnology (six listings) andTechnology
Hardware & Equipment (two listings).
Materials stocks were also solid performers
during the year. A total of 12 new market
entrants came from the Materials sector with
ten of these being within the small cap sector
for a total of 13% of all new listings. Whilst this
is an increase on both 2015 (three listings) and
2014 (five listings), it is still somewhat short of
the total achieved in 2013 when 87% of small
cap listings were from the Materials or Energy
sectors. In 2016, the Energy sector only
achieved a single listing (2015: one listing) as
the ongoing difficulties within the oil and gas
industry continued to impact upon this sector.
The Investments and Diversified Financials
sectors also featured well again this year with
a total of 11 listings, of which seven were small
cap entities. However, these sectors are down
on 2015, when they contributed a total of 18
new listings.
The largest contributors to the total funds
raised for the year of $7.50 billion were Real
Estate ($2.53 billion) and Food, Beverage &
Tobacco ($1.01 billion).This latter sector was
assisted considerably by the listing of Inghams
Group Limited which raised $596.61 million via
its IPO.
In terms of funds raised by the small cap
sector, the Investment sector contributed
four listings totalling $175.18 million (or 21%
of funds raised) and the Software & Services
sector contributed 16 listings for $152.41
million (or 18% of funds raised).The average
funds raised by small caps within the Software
& Services sector, however, was only $9.53
million, reflecting the characteristics of new
entrants within this sector.
The Software & Services sector has been a
strong performer not just in the IPO market
but also through reverse takeovers of listed
shell companies, predominantly from the junior
exploration sector. This contrasts somewhat
with international conditions, particularly in the
US market in 2016 where tech listings have
been subdued in both the current and previous
years, and it remains to be seen how this
sector will perform in 2017.
Number
Amount Raised
($m)
Number
Amount Raised
($m)
Number
Amount Raised
($m)
Number
Amount Raised
($m)
Automobiles & Components 2 81 1 82 1 31 - -
1sknaB 5 1 122 1 5 - -
Capital Goods 5 961 1 27 4 42 1 27
Commercial Services & Supplies 3 165 3 180 2 18 1 55
Consumer Durables & Apparel - - 2 20 - - 1 7
Consumer 3secivreS 55 5 369 3 55 4 37
Diversified Financials 5 336 7 613 3 32 3 18
1ygrenE 30 1 4 1 30 - -
Food, Beverage & Tobacco 7 1,011 3 889 1 4 - -
Health Care Equipment & Services 4 91 8 252 3 29 6 103
Household & Personal Products - - 2 271 - - - -
1ecnarusnI 15 2 157 1 15 - -
Investments 6 883 11 1,156 4 175 7 315
21slairetaM 153 3 9 10 66 3 9
Media 1 188 - - - - - -
Pharmaceuticals & Biotechnology 6 35 5 58 6 35 4 25
Real Estate 7 2,526 4 824 2 24 1 11
5gniliateR 359 5 372 2 52 2 41
Semiconductors & Semiconductor Equipme 1 10 - - 1 10 - -
Software & 12secivreS 545 15 1,537 16 152 10 127
Technology Hardware & Equipment 2 11 2 24 2 11 2 24
Telecommunication Services - - 3 52 - - 2 27
Utilities 1 42 1 2 1 42 1 2
49latoT 7,502 85 7,020 64 828 48 828
Industry
Sector Analysis
All llamSsgnitsiL Cap Only
2016 2015 2016 2015
The best performing
sectors were
Software & Services
and Materials.
Sector analysis
Ongoing sector diversity highlights an improving market

7. 5Great people, great results
¹ Based on the funds target being the
maximum subscription, or in the absence
of a range, the amount sought per the
final revised prospectus. Any amounts
exceeding these amounts would represent
oversubscription.
In a positive indicator for the IPO market,
subscription rates were up significantly during
2016 with 83% of all IPOs meeting their
subscription targets.Total funds raised during
the year were, on average, 102% of their
targeted subscription amounts.This compares
favourably with 2015 with only 58 companies
(or 68%) reaching their target at an average
subscription rate of 91%.
Subscription rates were assisted by the
contribution of small cap companies with
all four of the smallest IPOs (<$10 million)
reaching their target and 24 (or 86%) of those
within the $10-25 million bracket. Both of
these market capitalisation brackets closed, on
average, oversubscribed achieving subscription
rates of 121% and 101%, respectively.
In terms of other market capitalisations, large
cap companies also performed well, with 26
(or 87%) of all large caps reaching their targets
and raising an average of 104% of their goals
in 2016.
The poorest performing bracket was $50-75
million, with only four (57%) being fully or
oversubscribed with entities in this range
reaching only 69% of their cumulative raising
target on average.
With respect to subscription rates by industry
sector, a total of 10 different industry sectors
overall met their targets. Only two sectors had
a success rate of 50% or less of companies
meeting their targets (Utilities – 0% and
Technology Hardware & Equipment – 50%).
The Materials sector performed well in terms
of subscriptions with all 12 of its entrants
meeting or exceeding their targets. Software
& Services was also a strong performer with
19 of the 21 listings in this sector meeting their
targets.
Underwritten offers, unsurprisingly, met
or exceeded their targets 93% of the time
which compares to 78% for those offers not
underwritten. It is notable that the amount of
offers which were underwritten has decreased
significantly in 2016 with only 31% recorded
in 2016 compared to 44% in 2015 and 66% in
2014.
% of SubscriptionTarget Achieved
121%
101%
91%
69%
88%
104%
0%
20%
40%
60%
80%
100%
120%
140%
0 to 10 10 to 25 25 to 50 50 to 75 75 to 100 100+
Market Capitalisation at Listing ($m)
20%
33%
40%
29%
33%
17%
43%
10%
50%
100%100% 100% 100%
60%
100% 100%
67%
100% 100%
83%
57%
100% 100%
90%
50%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
ShareofCompanies
Target Not Achieved Target Achieved
80% 67%
71%
100%
% of SubscriptionTarget Achieved by Sector
IPO subscription rates
Small cap listings well subscribed

8. 6 www.hlb.com.au
IPOs outperformed the broader market again
in 2016, continuing the trend of previous
years. New market entrants had an average
share price gain of 16% above listing price
and this was even greater in the small cap
segment where the average increase was
22% compared to initial listing price.This is a
strong performance by new entrants against
the overall ASX 200 which appreciated by 7%
during the year.
In terms of share price performance by industry
sector, Capital Goods (+92%) and Health Care
Equipment & Services (+68%) were the best
performing sectors on average. Excluding
sectors with less than 3 listings, only three
industry sectors recorded year-end losses
being Diversified Financials (-18%), Consumer
Services (-16%), and Commercial Services &
Supplies (-12%).
Share price performance by small cap entities
was also positive relative to the wider market.
Within the small cap space, Capital Goods
performed solidly (+187%), as did the sectors
of Food, Beverage &Tobacco (+230%),
Retailing (+80%) and Semiconductors &
Semiconductor Equipment (+65%) although
these three sectors contained just one or
two entrants each.The Capital Goods sector
continued its positive performance from 2015
when there was an average 81% increase in
small caps.
There was mixed performance fromTechnology
and Biotechnology stocks in terms of share
price appreciation. Software & Services listings
gained a 2% average return (16 listings),
Technology Hardware & Equipment had an
8% average return from two listings and
Pharmaceuticals & Biotechnology recorded a
7% increase on average from six listings. This
contrasts strongly with the experience in 2015
when the Software & Services sector fell 20%
on average against their listing price but the
Pharmaceuticals & Biotechnology (+49%) and
Technology Hardware & Equipment (+81%)
performed very well.
The poor showing from the Materials sector in
2015 (-1%) reversed in 2016 with the industry
finishing in positive territory by 15% on
average.
In terms of share price performance across
all market capitalisations, several industries
performed well during the year appreciating
by over 40% on average. In addition to
Capital Goods and Health Care Equipment
& Services as noted above, several sectors
recorded strong results for investors such as
Semiconductors & Semiconductor Equipment
(+65%), Insurance (+43%) and Media (+43%).
The standout performer of 2016 was Aurora
Labs Limited which finished the year with a
share price of $2.99, an increase of 1395%
over its listing price of $0.20.The stock has
peaked above $3.50 during the year, and has
again exceeded the $3.00 mark since the end
of the year.The first day gain was similarly
strong increasing by 150% to $0.50. Other
notable results were Abundant Produce
Limited (+230%), Noxopharm Limited
(+155%), Afterpay Holdings Limited (+152%)
and CFOAM Limited (+135%).
A total of 43 stocks ended their year in negative
territory with 17 of these recording decreases
of 25% or more and five losing more than a
third of their share price since listing.
First day performance was mixed, with 56
recording gains including CFoam Limited
(+250%), Abundant Produce Limited (+175%)
and Aurora Labs (+150%). 25 IPOs had poor
first days, with three listings recording losses
of 25% or more.
2016 IPO Share Price Performance
-10%
0%
10%
20%
30%
40%
50%
60%
70%
0 to 10 10 to 25 25 to 50 50 to 75 75 to 100 100+
Averagereturn
Market capitalisation on listing ($m)
Day one closing price 31 December 2016 closing price
¹ Reflects the overall gain from a notional investment of $1 in each IPO, based on the share price
at 31 December 2016.
² Data not presented for industry sectors with less than three IPOs.
29%
15%
1%
7%
9%
6%
68%
8%
-18%
-16%
-12%
92%
-40% -20% 0% 20% 40% 60% 80% 100%
Software & Services
Retailing
Real Estate
Pharmaceuticals & Biotechnology
Materials
Investments
Health Care Equipment & Services
Food, Beverage & Tobacco
Diversified Financials
Consumer Services
Commercial Services & Supplies
Capital Goods
Average Return
2016 IPO Share Price Performance by Industry 1, 2
Share price performance
IPOs outperform the market

9. 7Great people, great results
Case study
VEEM Limited
IPO provides for future growth
When Perth-based marine technology company Veem Limited
(ASX: VEE) decided to IPO it was with a view to provide a financial
structure to capitalise on the growth opportunities that new product
developments were creating. It was also an opportunity to provide a
mechanism to manage succession planning.
Mark Miocevich, managing director of Veem said: “The board had
always considered that becoming a public company, or part of a
public company, was a desirable direction, and we did not see any
major downsides in pursuing an IPO.
“The cost of the IPO, and the additional board discipline required as
a listed entity, were seen as reasonable tradeoffs for the potential
benefits that an IPO offered. The IPO process ran smoothly and
the key to this success was ensuring the company was IPO ready
before the process began,” Mr Miocevich said.
This was demonstrated by having:
1. Many years of audited profitable performance.
2. A potentially high growth future product portfolio.
3. A highly structured, high compliance business profile.
4. A well developed business plan.
“Making the company IPO ready takes many years of product and
system development. My advice for those considering an IPO in the
future is to make your company think and act like a public company
as early as you can.The transition is then smaller to make and will
ultimately be more successful.”
He also offers advice on the importance of managing expectations.
“The IPO process time frame was longer than predicted by
approximately three months.There were valid reasons for the delay,
so my advice to others would be to allow a little longer than is
initially thought.
“Because we used the best subcontractors to assist in the
management of the IPO process, only realistic expectations were
created from the beginning.
“Following the IPO, the overall process could be evaluated against
those realistic expectations, and it was considered to be very
successful from the board’s perspective.”
Not surprisingly, there was increased workload for the board and
senior management during the IPO process. Mr Miocevich’s advice
on how to manage this includes:
1. Having a comprehensive company budgeting model and easily
accessible historical financials.
2. Having a comprehensive business plan including company
history.
3. Engaging a financial consultant whose responsibility it is to
prepare the company’s financial modeling for the IPO.
“This is a substantial amount of work in itself and would have
placed an unreasonable burden on the board and staff had it not
occurred,” he said.
Since listing on the ASX there has been a definite upside impact on
the business.
“There is an increased need for public relations to provide the
higher public profile required for a public company, which is a
positive for all of the company’s stakeholders.
“There has also been an increased focus by senior management,
and the board, on meeting all forecasts.This dedication to meeting
targets can only have a positive impact on the business.”
Mr Miocevich offers a final piece of advice for those looking to
undertake an IPO.
“Perhaps the most significant consideration is to choose the right
adviser,” he said.
“One of the most important factors which contributed to a
successful IPO for the company was finding the best consultants to
guide the company through the process.
“Without the efforts of Danny Buckley and his team at HLB Mann
Judd, we may have been looking at a very different outcome.”
Raised $25 million on listing.
Investigating Accountant
October 2016

10. 8 www.hlb.com.au
During 2016 we observed that the “backdoor”
continued to provide an entry for many
businesses to access the ASX for the first
time, rather than via an IPO. As observed last
year, the surge in the number of backdoor
listings over the last three years can be
attributed to changes by the ASX in 2014,
including allowing companies to issue shares
below 20 cents each, along with adopting
a policy to automatically remove long-term
suspended entities which has acted as an
incentive to some current ASX list vehicles
to look for reconstruction opportunities.
Further, the end of the mining boom saw the
proliferation of exploration companies reduced
to shells and seeking other investment
opportunities outside the mining industry.
Changes to ASX Listing Rules and Guidance
Note 12 (effective 19 December 2016) are likely
to have an impact on backdoor listings and the
popularity of the backdoor as an alternative
listing route may slow during 2017.
IPO or through the backdoor?
A reverse takeover, alternatively known as a
backdoor listing, usually involves a listed shell
company acquiring the shares or assets of
an unlisted company in return for shares in
the listed company. Shareholder approval is
required from the “acquiring” listed vehicle
for the transaction and the entity will typically
change its strategy, control, management and
name at this time. An equity capital raising
often accompanies the listing and offers a new
life for a dormant shell company.
Listing via the backdoor, rather than via an
IPO usually involves costs associated with
extra legal and accounting work involved in
preparation of expert reports and agreements
for approval at a meeting of shareholders.
A backdoor listing requires shareholder
approval and, as such, that process contains
some uncertainty and may take longer than a
controlled IPO approach.
As an alternative listing route to IPO, a
backdoor listing can have advantages
for certain companies with particular
circumstances.The data observed in 2016
shows it’s typically smaller businesses and
capital raisings that opted for a backdoor listing
as opposed to an IPO. Further, during 2016 a
large number of companies in the innovation
and technology sector have listed via the
backdoor.
The new ASX Listing Rules require that a
listed company’s share register has at least
300 security holders each holding at least
$2,000 of securities. A benefit of a backdoor
listing is the listed shell company has existing
shareholders which may assist the entity to
achieve the required shareholder spread to
comply with ASX relisting requirements (noting
the minimum $2,000 parcels must still be met)
that it may not achieve via an IPO.Through a
backdoor listing, a company can request the
ASX to waive the 20 cent minimum issue price
and allow an issue price as low as 2 cents.
If the shell company has existing cash and
expertise within the board of directors, this
would also offer a significant advantage over
an IPO.
ASX closing the backdoor
The new ASX Listing Rules and changes
to Guidance Note 12 are likely to provide
greater hurdles to those seeking listing via
the backdoor, and the market is likely to see a
significant decline in the number of backdoor
listings in 2017.
The new ASX Listing Rules in relation to
audit requirements for historic financial
information will also impact backdoor listings,
with the ASX’s new position requiring in most
instances 2 full years of audited accounts
for the entity seeking admission and any
significant business it has acquired in the
previous 12 months (or proposes to acquire
in connection with the listing). Significant is
defined as more than 25% of the consolidated
net assets, consolidated total equity interests,
consolidated annual revenue.
Other changes to ASX Listing Rules include
a change to the profit test to increase the
requirement for consolidated profits for the
12 months prior to admission from $400,000
to $500,000, a change to the NetTangible
AssetsTest to increase the net tangible assets
from $3 million to $4 million, and a change to
the Market CapitalisationTest to increase the
market capitalisation from $10 million to $15
million.
One of the advantages backdoor listings had
over IPOs was that securities in an entity that
announces a backdoor listing could continue
trading up to the day on which the security
holders are asked to approve the transaction.
ASX has changed this policy in Guidance Note
12 and will now suspend trading in an entity’s
securities from the time it announces it is
subject to a reverse takeover, until it has re-
complied with ASX’s admission and quotation
requirements under Listing Rule 11.1.3.
The full impact of these and the other changes
to the ASX Listing Rules are yet to be felt
on the market.The effect of these changes
is likely to reduce the number of backdoor
listings and small cap IPOs in 2017, both of
which have been dominated by the technology
sector in recent years. With the introduction of
the changed listing rules aimed at improving
the quality of new listings, the performance of
backdoor listings and small cap IPOs in 2017
will be interesting to watch.
Reverse takeovers (RTOs) overview
The impact of the new ASX Listing Rules
Simon James
Partner
Corporate Advisory
Sydney
As an alternative
listing route to
IPO, a backdoor
listing can have
advantages for
certain companies
with particular
circumstances.

11. 9Great people, great results
Many exploration
entities have been
forced, due to
market conditions,
to undertake
backdoor listings
in recent years.
Following much consultation and feedback,
the Australian Securities Exchange (ASX) has
introduced a number of changes to the listing
requirements for companies.
The new rules, which came into effect on 19
December 2016, were tempered following the
consultation period but are still likely to have an
impact on future transactions and, in particular,
reverse takeover (RTO) transactions (also
known as backdoor listings).
Some of the key changes include:
Financial thresholds
The financial threshold for listing has been
increased, meaning companies will now need
to meet either a net tangible asset test of
$4 million (up from $3 million) or a market
capitalisation test of $15 million (up from $10
million).
Free float requirement
A 20 percent minimum free float requirement
at the time of admission has been introduced.
Previously there was a general expectation
that entities should list with a free float of at
least 10 percent but ASX had also accepted
a lower free float if companies could explain
their plans and timeline to increase the free
float.
Minimum spread requirements
The ASX had originally proposed changing the
minimum spread requirements to require 200
security holders (if the entity has a free float of
less than $50 million) or 100 security holders
(if the entity has a free float of $50 million
or more), with each security holder having
a parcel of securities with a value of at least
$5,000.
The final rules have changed the spread test
to a single tier of at least 300 security holders,
each holding at least $2,000 of securities.
Audited accounts
“Asset test entities” are now required to
disclose their audited accounts for the last two
financial years. The original proposal was for
the last three years.
In addition, such entities must also provide the
audited accounts of any significant acquisitions
in the 12 months prior to listing, or proposed
acquisitions in connection with the listing.
Impact on exploration companies
During the consultation period, there had been
some speculation that ASX may allow carve
outs for explorers, in particular regarding the
net tangible asset requirement.
This was a key concern because exploration
entities are very dependent on ready access
to equity markets to achieve their business
objectives and undertake exploration activity.
While the carve out did not happen, overall
the industry appears satisfied that the ASX
took the feedback on board and moderated its
proposals.
For instance, the original proposal by the
ASX was to increase the proposed market
capitalisation test to $20 million.
However, as highlighted in previous IPO Watch
reports, listings for juniors have tended to be at
the lowest market capitalisations and in many
cases market capitalisation on listing has been
less than $20 million.
Changing the market cap test to $15 million
rather than $20 million will make it easier for
juniors to achieve their IPO goals.
Another welcome adjustment to the original
proposal is dropping the requirement for
investors to have a parcel of securities
with a value of at least $5,000, and instead
maintaining the existing $2,000 requirement.
Resource companies are generally highly
speculative plays for “Mum and Dad” investors
and the self-managed superannuation fund
market, and an increase in the minimum
investment was likely to negatively influence
decisions on capital allocations for these
investors.
Whilst a $2,000 minimum investment could be
seen as an acceptable allocation of funds to a
high risk investment, many investors would not
consider a $5,000 minimum investment in the
same light.
Backdoor listings
Many exploration entities have been forced,
due to market conditions, to undertake
backdoor listings in recent years.
There is a natural limit on the ability of
exploration entities to sustain their existence
without further capital injections and many
entities only have sufficient cash reserves for
one or two quarters. The exit route for most
of these entities in recent years has been to
‘backdoor’ a new business into the shell.
The past two years in particular have seen
high numbers of recompliance listings where
explorers have changed the nature of their
business - a high proportion being into the
technology sector.
The moderated changes as outlined above,
together with improved investor sentiment
as evidenced by a healthy pipeline for the
Materials sector at the start of 2017, may mean
juniors return to the IPO market in the coming
year.
Amendments to ASX listing rules
New changes are balanced and moderate
Marcus Ohm
Partner
Corporate &
Audit Services
Perth

12. 10 www.hlb.com.au
Reverse takeovers (RTOs) were a significant
feature of 2016. Also known as backdoor
listings, 69 RTOs took place during the year,
with associated capital raisings totalling $368.42
million.This represents a notable increase on
2015, which was already a strong year for RTOs,
when 58 companies listed through this method
and raised $330.14 million in the process.
It has been evident over the last few years that
there has been a trend for materials companies to
transform into technology companies via backdoor
listings.There has also been a geographic
diversification from Western Australian-based shell
companies to various other States and industries.
From an industry-based perspective, in 2016 there
was a net increase of 23 listings for the Software
& Services sector, and two listings forTechnology
Hardware & Equipment which can be contrasted
with a net decrease of 25 listings for Materials,
and a decrease of ten listings for Energy stocks.
This trend corresponds closely to the previous
year when Software & Services (+17 companies)
increased at the expense of Materials (-18
companies).
The geographic change has been less pronounced
than the movement between industries. In 2016,
WA had a net loss of 7% or three companies,
which follows on from the relatively small
movement of seven companies in 2015. NSW
experienced a net gain of three in 2016, which was
down on the seven in 2015.
Unlike the IPO market, there was no evidence of a
final quarter rush to complete transactions prior to
ASX rule changes being implemented.The March
quarter of 2016 was the best performer with 28
RTOs (41%) raising a total of $135.15 million, or
27% of the total. In 2015, the best performing
quarter was the June quarter, with 16 listings
(28%) raising $103.66 million (31%).
From a share price performance perspective,
RTOs performed worse on average than the
overall market, with an average gain of 6%
compared to the gain in the ASX 200 of 7%.
This was a marked deviation from 2015, when
backdoor listings significantly outperformed the
market, recording average gains of 9%, compared
to a loss of 2% in the ASX 200.
A total of 22 RTOs (or 32% of RTOs) finished the
year with share prices in the black (2015: 22 RTOs
or 37%). It was notable in 2016 that significantly
more entities recorded a net loss in share price
over the year, with 42 newly back-doored entities
(61%) ending up in negative territory compared to
just 28 entities in 2015 (48%).
Reverse takeovers (RTOs) overview
An analysis of RTOs
-100% -50% 0% 50% 100%
WA
VIC
TAS
SA
QLD
NT
NSW
ACT
2016
2015
1
Relative Movement by State
20.00
40.00
60.00
80.00
100.00
120.00
140.00
160.00
2015 - March 2015 - June 2015 -
September
2015 -
December
2016 - March 2016 - June 2016 -
September
2016 -
December
0
2
4
6
8
10
12
14
16
18
AmountRaised($m)
NumberofRTOs
Number of RTOs Amount Raised ($m)
RTO Activity by Quarter
From a share price
performance perspective, RTOs
performed worse on average
than the overall market.
¹ Relative movements are calculated as the difference between the total home
States of the companies prior to the completion of the RTO, and, subsequently,
expressed as a percentage increase or decrease.

13. 11Great people, great results
Reverse takeovers (RTOs) overview
Analysis by market capitalisation
$10
$20
$30
$40
$50
$60
0
5
10
15
20
25
30
35
0 to 10 10 to 25 25 to 50 50 to 75 75 to 100 100+
AmountRaised($m)
NumberofRTOs
2015 RTOs 2016 RTOs 2015 Median Funds Raised 2016 Median Funds Raised
RTOs by Market Capitalisation
Market capitalisation ($m)
Similarly to 2015, reverse takeovers were most
prevalent amongst the smaller cap companies.
A total of 32 RTOs had a market capitalisation
of less than $10 million or 46% of all RTOs.The
$10-25 million market capitalisation range was
also a standout with 26 listings comprising
38% of the total. In the previous year, the
most common market capitalisation bracket
was $10-25 million, which had 27 backdoor
listings (or 47%).
The <$10 million and $10-25 million brackets
contributed the most to the total funds raised
through an RTO process with the smallest
companies (<$10 million market capitalisation)
adding $121.47 million, or 33% of the year’s
total of $368.42m.This was narrowly behind
those within the $10-25 million bracket, who
raised $130.98 million or 36% of the total.
This bracket was the best performer in 2015,
with 43% ($141.07) of the total funds raised of
$330.14 million.
In the previous year, the large cap companies
recorded the highest average funds raised
at $50.00 million which contrasts strongly
with the current year. As there was only one
relatively small RTO within the >$100 million
market cap bracket during the year, average
funds raised by this market capitalisation
bracket was only $1.56 million, and was
significantly behind the $25-50 million bracket,
which recorded an average raising of $11.95
million.
The smallest companies (<$10 million)
performed well with respect to their share
prices recording an average gain of 41% by the
end of the year.This was also the only bracket
to record an average gain, with significant
losses from the large caps (a loss of 65%)
and the $25-50 million bracket (loss of 21%)
reducing the average for all RTOs where the
average price increase was 6%.The wider
ASX 200 climbed by 7% over the same period.
RTOs did not therefore outperform the market
significantly in 2016 when compared to the
previous year when the average gain of 9%
represented a solid performance against the
ASX 200, which decreased by 2%.
Similarly to 2015,
reverse takeovers
were most
prevalent amongst
the smaller cap
companies.

14. 12 www.hlb.com.au
The technology sectors were the most
significant inbound industries for RTOs during
2016 recording a total of 35 RTOs.The largest
contributor was Software & Services with 26
companies utilising a backdoor listing with
Pharmaceuticals & Biotechnology (five listings)
andTechnology, Hardware & Equipment
(four listings) also making a contribution.
Interestingly, ten materials stocks listed via
a backdoor listing during the year (14%) in
what has been a year of recovery for a sector
which in recent history has tended to enter
the market via a traditional IPO process.These
trends follow 2015 fairly closely when 22
technology stocks listed through RTO (38%)
and 12% of all backdoor listings were for
Materials stocks (seven listings).
Software & Services, unsurprisingly, was the
largest contributor to total funds raised with
$110.07 million (30%).This is similar to 2015
when this sector raised $128.01 million or 39%
of the total. In contrast, RTOs within the Real
Estate sector were less active in the current
year only contributing 2% ($5.57 million) to the
total funds raised after comprising 15% of the
total capital raised in 2015.
With respect to share price performance, the
Pharmaceuticals & Biotechnology sector was
the standout performer recording average
gains of 163%.Telecommunications Services
also closed out the year well recording an
average gain of 136% from the two listings
within this sector and continuing the strong
performance from 2015 when the average gain
was 56%.
Materials stocks were relatively poor
performers, with an average loss of 14%
which compared to the previous year average
loss of 23%. The worst performing sector
during 2016 was, however, the Commercial
Services & Supplies sector with an average
loss of 43%, which was a significant negative
turnaround when the industry sector recorded
an average gain of 51% in 2015.
RTO Share Price Performance By Industry
-100% -50% 0% 50% 100% 150% 200%
Capital Goods
Commercial Services & Supplies
Food Beverage & Tobacco
Health Care Equipment & Services
Materials
Pharmaceuticals & Biotechnology
Software & Services
Technology Hardware & Equipment
Average Share Price Performance
2016
2015
Average Return
Reverse takeovers (RTOs) overview
Analysis by industry sector
With respect
to share price
performance, the
Pharmaceuticals &
Biotechnology sector
was the standout
performer...

15. Great people, great results
The HLB Mann Judd
Australasian Association
consists of nine
member firms and two
representative firms across
Australia and New Zealand.
It represents a group
of specialists providing
business advice and
services to a wide range of
business organisations and
private clients.
As members of HLB International, HLB Mann
Judd firms are part of a worldwide network
of respected accounting firms with more
than 500 offices in over 100 countries. We
are ranked in the top 12 largest accounting
and business advisory groups worldwide.
Through this international network we obtain
the benefit of HLB’s global experience and
provide our clients with access to professional
expertise throughout the world.
HLB Mann Judd firms offer a comprehensive
range of professional services to listed clients
and companies pursuing an IPO. In addition
to acting as corporate advisers, investigating
accountants, and tax and accounting advisers,
we have extensive experience in assisting
clients in their preparation for an IPO and in
evaluating the benefits and feasibility of an IPO
against alternative strategic options.
Our assistance to companies pursuing an IPO
or RTO typically includes:
nn Investigating accountant’s reports on
historical and forecast financial information
nn Independent expert’s reports
nn Analysis and advice on feasibility and
alternatives to an IPO
nn Pre-IPO diagnostic review
nn Corporate and structuring advice
nn Financial and taxation due diligence
nn Valuations
nn Company and shareholder tax advice and
planning
nn Accounting advice.
About HLB Mann Judd
Recent transactions
HLB Mann Judd is proud to have assisted
in the following IPOs or RTOs in 2016:
Intiger Group Limited
TECHNOLOGYMETALS AUSTRALIA LIMITED

16. Australian IPO Activity in 2016
IPOWatch Australia
Member Firms
Adelaide
Tel +61 8 8133 5000
Email mailbox@hlbsa.com.au
Auckland
Tel +64 9 303 2243
Email hlb@hlb.co.nz
Brisbane
Tel +61 7 3001 8800
Email mailbox@hlbqld.com.au
Gold Coast
Tel +61 7 5574 0922
Email info@hlbgc.com.au
Melbourne
Tel +61 3 9606 3888
Email mailbox@hlbvic.com.au
Perth
Tel +61 8 9227 7500
Email mailbox@hlbwa.com.au
Perth (Insolvency WA)
Tel +61 8 9215 7900
Email kwallman@hlbinsol.com.au
Sydney
Tel +61 2 9020 4000
Email mailbox@hlbnsw.com.au
Wollongong
Tel +61 2 4254 6500
Email mailbox@hlbw.com.au
Representative Firms
Hobart | Lorkin Delpero Harris
Tel +61 3 6224 4844
Email mail@ldh.com.au
Lismore |Thomas Noble and Russell
Tel +61 2 6621 8544
Email mailbox@tnr.com.au
The HLB Mann Judd Australasian Association is an independent network of
accounting firms, business and financial advisers with offices throughout Australia
and New Zealand. Each member firm is separately owned and managed and has
no liability for the acts and omissions of any other member firm. Not all services
listed in this brochure are provided by all member firms.
HLB Mann Judd firms are part of HLB International, a world-wide network of
independent accounting firms and business advisers.
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