03
May

Reliance Worldwide

Reliance WorldwidePlumbing manufacturer Reliance Worldwide (RWC) closed the first day of trading at $2.95 after the offer was priced at $2.50 by joint lead managers JP Morgan and Macquarie Bank in late April 2016. Quest participated in this IPO, one of the few we have been attracted to in this IPO season.

RWC is a designer, manufacturer and supplier of water flow and control products for the plumbing industry with 61% sales being in the USA , 23% in Australia and the balance ROW including UK, Canada and New Zealand. RWC distributes through retailers and wholesalers such as Home Depot, Ferguson, Tradelink  and Reece.

Attributes that brought us to this float include the long standing experienced management, the niche Push to Connect (PTC) technology, the diversity of the business globally and a track record dating back to 1986. RWC is a classic Aussie success story starting from humble beginnings and sneaking up on a global market through sheer dedication, creativity and attention to detail.

RWC was widely sought locally and offshore by large, mid and small cap managers both local and overseas. The robust bidding into the IPO book suggests that some large institutional investors have corner stoned this float and intend to build a position and take a long term view.

Reliance rates as a “B” on our Q-Stocks quality scale and easily provides our minimum 15% upside to our Q-Value valuation target from the float price of $2.50.

We expect RWC to be trading above $3.00 in May 2016.