Bain Capital is flying high after Virgin Australia’s successful IPO, which saw shares surge 8.3% on debut, landing the private equity giant with a roughly 40% internal rate of return on its initial investment, according to a report by Reuters.
The AUD685m ($439m) float values the airline at AUD2.3bn on a fully diluted basis and comes nearly five years after Bain acquired Virgin out of administration in 2020 for AUD731m. The IPO saw Bain sell a 30% stake, raising nearly triple its original outlay – including prior sales to Qatar Airways (25%), Virgin Group (5%), and the state of Queensland (2%), alongside a substantial dividend in 2022.
Despite selling down its holding, Bain remains Virgin’s largest shareholder with a 40% stake, much of which is locked up for 12 months.
The IPO priced Virgin at a 7x earnings multiple – below market leader Qantas’s 9x – and the market reaction suggests strong investor appetite and room for further upside. Bain’s calculated exit strategy and retained exposure constitute a textbook private equity play – restructuring, growth, partial realisation, and a premium long-term hold.
