Fitgenes latest company to make ASX debut via reverse takeover

An Australian company that specialises in health advice tailored to individuals’ genetic profiles is gearing up to list on the Australian Stock Exchange via a reverse takeover.

Fitgenes is the latest in a spate of businesses which are listing via reverse takeovers, following in the footsteps of ZipTel and Fatfish which both listed via this method earlier this month. 

Fitgenes is headquartered in Brisbane and provides a range of health, fitness, wellness and nutrition advice via a network of 450 professionals, operating in Australia, New Zealand, Singapore, Malaysia, Hong Kong and the US.

According to Fairfax, shareholders in publicly listed spa operator ATW Holdings, formerly known as Atos Wellness, agreed to acquire Fitgenes in April, triggering the need for a re-compliance listing.

Once re-listed, the company will be re-named Fitgenes Ltd, and the board will include current chairperson Carrie Hillyard, a former director of ATW Holdings, and investor Elizabeth McCall, whose venture capital outfit Yuuwa Capital chipped in $1 million in a funding round for Fitgenes in June.

Also with a seat at the board table will be Fitgenes chief executive Robert Mair, who was also a director of ATW Holdings, Conrad Crisafulli and John Hurrell.

According to Fairfax, there are 12 million shares priced at 30 cents available in the Fitgenes initial public offering, which will aim to raise $3.6 million, with the total number of shares in the company to reach 42 million on completion of the IPO if fully subscribed. For the IPO to proceed, at least $3 million must be raised.

Dale Gillham, chief analyst at Wealth Within, told SmartCompany the reverse takeover process for Fitgenes has been in the works for a number of years, with ATW Holdings suspended from trading on the ASX in September 2011.  He says the company is now being re-capitalised in order to start trading again.

Gillham says reverse takeovers are similar to backdoor listings, “which are when a privately held company purchases a shelf company that is listed on the Stock Exchange”.

“Reverse takeovers are in fact very similar, as the privately held company takes over the listed entity over a period of time, rather than the other way where listed entities generally take over private companies,” he says.

“The difference is really that a backdoor listing is when the shelf company is currently suspended from trading, as in this case with ATW.”

Gillham says for some companies a backdoor listing or reverse takeover is “often far quicker and cheaper to effect than through a new listing on the ASX as all the work has been done”.

“In the past in Australia we have seen this backdoor listing and or reverse takeover done through small mining companies,” says Gillham.

“In this case, it seems more of a proves of a merger or takeover along with raising capital, which is the other common reason why reverse takeovers occur, as being listed allows the company to go to the market to raise capital rather than to a bank as a private company has to do.”

Gillham says there are other reasons why a company would pursue a reverse takeover.

“Sometimes private companies undertake reverse takeovers so as to make the company more valuable, and as such this can be a nice exit strategy for the shareholders of the private company as they could more easily sell down their shareholdings on the open market,” he says.

SmartCompany contacted Fitgenes but did not receive a response prior to publication.