December 11, 2017

Groupon Prices IPO at $16 to $18 a Share

Groupon, the Chicago based company that offers subscribers daily deals at restaurants and stores, is set to go public on November 3rd.


Offering 30 million shares at a range of $16 to $18, Groupon could potentially raise $510 million, with a company valuation of as much as $11.4 billion. If demand exceeds the number of shares initially offered, an additional 4.5 million shares may be made available by the underwriters.

Groupon initially filed to raise $750 million, but concerns about certain accounting practices and ongoing sustainability caused it to scale back.  Even though third quarter losses were $1.7 million, this was less than originally expected, and those losses occurred mainly in international business. North American business saw a profit, with earnings of $18.8 million.

Groupon has 149.2 million subscribers worldwide, seven times more than last year. Of those subscribers, approximately 29.5 million have purchased at least one deal from the site as of the 3rd quarter.

Even though the company has grown substantially larger recently, net revenue has slowed, growing only 9.6 percent in the last quarter to 430.2 million. That being said, Groupon says that it is still getting new subscribers.

This news comes as Groupon prepares to go on a two-week roadshow, hoping to attract potential investors. While looking to generate great interest in the IPO, Groupon is also aware that there may be tough questions from investors. Today’s prospectus hopes to quell any doubts about its sustainability, noting that the number of coupons sold per subscriber is up 27 percent from year to year, to 4.2. At the same time, the average revenue generated per coupon has grown approximately 31% over the same period last year.

But as Groupon tries to attract new subscribers by expanding the type of deals it offers, to include ticketed events and travel offers, these kinds of products bring in a lower profit margin per deal. Even though the yearly revenue has increased, the actual revenue per subscriber dropped in the third quarter to $3.3, a drop of 15 percent.

A big concern are marketing costs. The first 3 quarters of this year saw Groupon spending $613 million trying to attract new subscribers, compared to under $90 million in the first 3 quarters of 2010. With these concerns in mind, Groupon has reduced its marketing budget, with chief executive officer Andrew Mason pledging to further cut back expenses in the future.

Another issue that Groupon seeks to clarify is the notion of “selling stockholders”. The company has noted that its shareholders will not be offering any shares in the IPO. Recently, the founders of the company and their investors have sold a large amount of stocks, raising $950 million. $810 million of this amount went to current shareholders.

Groupon will trade on NASDAQ, using the ticker GRPN. The main Underwriters are Morgan Stanley, Goldman Sachs and Credit Suisse.

Related Links:

Dealbook Article

Groupon’s S-1 Filing at SEC

Techcrunch Article

BusinessWeek Article on Groupon IPO

Angie’s List Files For IPO

Angie’s List, an Indianapolis-based consumer website that provides consumer reviews of local service companies such as contractors and doctors, filed an initial public offering on Thursday. The company is looking to raise $75 million.


Founded in 1995 by Angie Hicks and Bill Oesterie, it has about 820,00 subscribers in 170 markets across the United States, posting an average of 40,000 reviews a month. The website works on a registered subscription basis, ensuring only unbiased reviews.

Angie’s List is not yet seeing a profit: even though Revenue increased by 40.5 percent to $38.6 million in the first half of 2011, it had a loss of $25.8 million. With marketing expenses on the rise, the filing states that the company intends to increase advertising spending, using money raised to “fund our advertising strategy to drive membership growth and for general corporate purposed, including working capital.”

The lead underwriter of the IPO will be Bank of America Merrill Lynch, Also participating are Allen & Company, Stifel Nicolaus Weisel, RBC Capital Markets, Janney Montgomery Scott, Oppenheimer & Co, ThinkEquity and CODE Advisors.

Read More:

Techcrunch Article

Dealbook Article

SEC S-1 Filing

Angie’s List

Tudou Drops After IPO

Shanghai-based Tudou Holdings, China’s second largest video website, saw its value plunge by as much as 19% on its first day of US trading.


Pricing its shares at $29 each, Tudou sold 6 million American Deposit Receipts (ADRs), raising $174 million in the offering, but it opened down at $25.11. By 1pm New York time, Tudou, nicknamed the ‘Chinese YouTube’, was down 8.3%. Tudou sold its stock at a 58% discount to rival video website, Youku. In contrast, Youko had a hugely successful offering when it went public in December, with the best first-day performance for a US listed IPO since 2005. Unfortunately, Tudou’s offering has come at a time when US investors are wary of US-listed Chinese stocks, due to recent accounting scandals and corporate governance issues.

Since it was founded in 2005, Tudou has grown dramatically. Tudou hosts more than 40 million videos, with over 200 million visitors per month. The site serves 40% of China’s monthly online population. As well as movies, tv shows and self-produced content, Todou offers user-generated videos, much like YouTube. The majority of revenue comes from online advertising, but in addition Tudou sells mobile access to China Unicom and China Mobile customers. Although its revenue has increased sharply in the past few years, its losses have also increased. In the three months ending March 31st, net revenue rose 167% to $12.1 million, but the net losses were almost $52 million.

The government-sponsored China Internet Information Center released data claiming that China had 485 million internet users at the end of June. This is quite a contrast to the US, which had 215 million users as of the end of July.

Both Tudou and Youku went public to raise funds for technology changes, expansion, and securing video rights through licensing deals. Talking to Bloomberg, Tudou CEO Gary Wang said: “We have plenty of challenges ahead to make sure we can bring in enough content to meet users’ needs, that the platform is growing rapidly and advertising numbers are also growing rapidly. We want to use the proceeds to grow the company organically.”

In addition to negotiating with US media companies and studios, Tudou is looking for content from providers in China, Japan and Korea amongst others. The Chinese audience craves global variety, and Tudou aims to provide them with just that.

Read more:

Bloomberg Article

Washington Post Article

Chicago Tribune Article

Wikipedia Entry on Tudou

Wikipedia Entry on American Depositary Receipts (ADRs)

Carlyle Group Prepares for IPO

Carlyle Group, a private equity firm, is going forward with its intention for an initial public offering, hoping to raise more than $1 billion, but has not formally filed with the Securities and Exchange Commission. In private meetings, the firm is contending that it is worth just as much as its rival, Blackstone Group LP (BX). According to accounts about Carlyle’s marketing materials, Caryle believes that with steadier earnings, shareholders should be offered a more predictable dividend. With a business model of spreading money into many smaller funds, as opposed to their competitors, who have larger sums in fewer pools, Carlyle argues that it should be treated more like a traditional asset-management company.

Speaking to Bloomberg news, Mark Bronzo of Security Global Investors said: “If they’re paying a decent dividend, especially in this marketplace, that’s going to get an attractive valuation. I think you’ll see a good appetite for this company because of the sheer size and name recognition. This is a premier group.”

IPO Registration and Disclosure

Formed in 1987 by David Rubenstein, Daniel D’Aniello and William Conway, and managing $153 billion, this is the largest IPO by a private equity firm since 2007, when Blackstone raised $4.75 billion. With the registration statement, Carlyle is required to disclose never before released financial information, including 24 years worth of returns for investors. In the past, only private investors have been privy to this information.

New Flagship Fund

Carlyle is also looking to start a new flagship fund totaling at least $10 billion. Investors in the last flagship fund, who have only seen less than 10% of their capital returned, are demanding that Carlyle itself contributes at least 3% to the fund’s capital. If that is the case, Carlyle will need to finance approximately $300 million over the next several years.

IPO Roadshow

Bloomberg is reporting that Carlyle’s roadshow includes efforts to reverse investors’ negative views on private-equity incentive fees, known as ‘carry’ or carried interest. These earning are very unpredictable, especially during an economic slowdown. In addition to persuading investors to pay a greater amount for carried interest, Carlyle is attempting to emulate Blackstone’s successful method of getting shareholders to pay for its diversification efforts. According to Blackstone’s founder, Stephen Schwarzman, its hedge-fund business grew to $40.6 billion as of June. The company’s total fee-earning assets under management rose by 27% to $129 billion in the second quarter. The largest portion of this was its hedge-fund business, accounting for $37.2 billion.

Diversification

While Carlyle hasn’t released comparable figures and still relies on buyouts for the majority of its revenue, it is looking to diversify in a similar way to Blackstone. Its purchase of Dutch money manager AlpInvest Partners NV, saw it enter the private equity funds-of-funds business. AlpInvest generated revenue of approximately 105 million Euros in 2010, including management and incentive fees.

Co-founder Mark Rubenstein has been focussing on starting new funds, looking at specific geographic areas where investors wanted to see their money put to work. He has overseen Carlyle’s buyout business expand outside of the US, with 35 offices spanning six continents.

Carlyle entered the business of real estate investing in 1997 and it formed a credit fund in 1999. Its Global Market Strategies division, led by former Morgan Stanley sales and trading chief, Mitch Petrick, has bought majority stakes in two hedge funds, since he joined in 2010. Carlyle’s 1440 private backers (limited partners) committed capital of $4.2 billion in 2010, according to the annual report. In comparison, New York based KKR, with 350 private investors, has raised $5 billion. Blackstone, with 1,300 private investors, raised $5 billion through the hedge-fund unit alone in the first half of this year. Blackstone’s total capital raised in 2010 was $18 billion.

Investor Concerns

Some investors are concerned about the fall of other private-equity stocks in recent years. Blackstone’s IPO was $31 a share on June 21, 2007. The stock fell below $31 a week later, and has never regained value. It was trading on the NYSE yesterday at $13.73. KKR and Apollo both lost value after they sold stakes to investors, but KKR is currently up about 5%.

Referring to Carlyle, Josef Schuster, founder of Chicago-based IPOX Schuster LLC, told Bloomberg news: “There’s a precedent from the incumbents that indicates to me that this shouldn’t trade markedly differently. Investors are not going to step up and pay a substantial premium.”

Underwriters

Carlyle has selected Citigroup, Credit Suisse and JP Morgan Chase to lead the offer. It is thought that Carlyle will list as early as September. After the IPO has been completed, D’Aniello will serve as chairman, with Rubenstein and Conway taking the roles of co-chief executive officers.

Read more:

Bloomberg Article

Financial Times

Wikipedia Entry for Carlyle Group

Wikipedia Entry for Blackstone Group LP

Wikipedia Entry on Carried Interest

Carlyle Group Website

Renewable Energy Group IPO

“2011 has been a big year for biodiesel manufacturers in the stock market, and Renewable Energy Group’s recent filing for an IPO is another huge addition to the market. With plans to raise $100 million in funds through stock trades, Renewable Energy Group is known as the largest biodiesel producer in America. Gevo, Solazyme and Kior are three different biodiesel companies that have registered for an IPO this year, but investors have been especially drawn to the IPO filing done by Renewable Energy Group due to the fact that they manufacture a large majority of their own biodiesel.

Currently, the Renewable Energy corporation runs six different biodiesel plants throughout America, adding up to a maximum output of 212 million gallons per year. Five of the six plants are owned by Renewable Energy (dubbed REGI as it’s stock ticker in the recent IPO filings), and the primary purpose of the IPO filing is to raise money to wholly purchase their sixth biodiesel plant. Additional plans for the company include the production of additional environment-safe chemicals, feedstocks and biofuels. Algae oil was said to likely be one of the companies first extensions of production upon acquisition of the $100 million.

The filings that the company put into action revealed a reported 68 million gallons sold in 2010, and revenues reaching beyond $200 million. With an $85.45 million reported revenue in 2008, Renewable Energy makes for a stock option that investors will not be able to leave alone. The first three months of sales in 2011 were triple that of the sales in the same period of last year, and the Iowa-based Renewable Energy Group has hopes to only increase the $3.74 million in profits that were reported in the first quarter of 2011.

Although the revenues are impressive, REGI has reported net losses in 2009, 2008 and 2010, but considering that the company has been in existence since 1996 many believe that these losses might simply be signs of a rapidly expanding company economy. Another matter to consider when it comes to Renewable Energy is the fact that, unlike many other biodiesel companies, Renewable Energy Group consists of quite a number of different companies in cooperation.”

GigaOm

Renewable Energy Firm Ind Eco Ventures Files For Rs 105 Cr IPO

Renewable Energy Group files $150 mln IPO

Demand Is High For Renewable Energy IPOs

Renewable Energy Group Plans To Raise 100 Million Through IPO

AVAYA IPO

“Avaya faces a rocky future and hopes to regain the money that has continued to elude them since first purchasing the company in 2007. In an attempt to meet the $8.2 billion originally paid out for the firm, the company is planning an Initial Public Offering (IPO) and expecting these efforts to raise a full $1 billion for cause. Even with this increase, the company will still only reach a value of $5 billion, still billions short of their original investment.

Avaya has been a part of the digital competition for years and even attempted joining the graphical tablet zone by releasing a desktop video device. Needless to say, this did not push their profits into the margins they were hoping and have since looked to other outlets. Avaya will be dealing with competition from other technological IPOs, such as Freescale Semiconductor Holding and the social network, LinkedIn. Despite the big names, they hold firm to their belief that the money will be made and a better future is just around the corner.

Goldman Sachs Group Inc. and Morgan Stanley will be underwriting the original IPO and the company hopes that the combined experts of Wall Street’s greatest minds will help put that stimulant into their revenue. Whether or not taking the step from a private to public company will help is unsure, but having powerful names like Goldman Sachs can only help. The IPO has been written to consume about 20 percent of the company, which was once a great concern of Avaya before going private with TGP Capital and Silver Lake in early 2007. A copy of the IPO shows that it is built with a solid structure and surely aimed at helping put some life back into the blood of the company.

As with all great companies on Wall Street, Avaya will go through its own ups and downs. Their initial investments and movements may not have had the greatest results, but there is only light on the horizon. Now we must watch and see if they possess the power to regain their money, or if they will fall victim to a falling economy as so many others before them.”

InformationWeek

Taking a Look at Avaya’s IPO

Copy of the Avaya IPO

Avaya Battles Competition and Debt

Avaya IPO Right Around the Corner

Wesco Aircraft Holdings, Inc IPO

Wesco Aircraft Holdings is a supply chain management provider for the aerospace industry based in Valencia, California. Founded in 1953, Westco has more than 1,000 employees and over 7,000 customers.

Wesco provides logistic solutions and comprehensive stocking programs for nearly every original equipment manufacturer in the aerospace industry.

Wesco announced the terms of their IPO on July 15, 2011, with an initial public offering of 21 million shares set to price in the range of $15.50 to $17.50. The lead underwriters are Barclays Capital and Morgan Stanley. Wesco will trade on the NYSE under the stock symbol WAIR.

For the 12 months ending March 31, 2011, Wesco booked $695 million dollars in sales.

Wesco Aircraft Holdings, Inc S-1/A Form

Wesco Aircraft Holdings, Inc

Wall Street Journal

Endocyte IPO

Endocyte is a West Lafayette, Indiana, biopharmaceutical company that develops Small Molecule Drug Conjugates (SMDC) to improve the efficiency and targeting of cancer drugs, designed to lead them directly to the diseased cells.

Endocyte currently has six drugs undergoing clinical trials. Its most advanced and promising drug, called EC145, is a chemotherapy agent for the treatment of ovarian and lung tumors. The drug works by attaching itself to the vitamin folate, tricking the cancer cells into absorbing the drug thinking it is the vitamin alone, while avoiding healthy cells.

In addition to EC145, Endocyte is working on drugs for prostrate cancer and inflammatory diseases. The company believes that their proprietary technology, called Small Molecule Drug Conjugates (SMDC) will be able to treat diseases like atherosclerosis, rheumatoid arthritis, osteoarthritis as well as advanced kidney cancer.

Endocyte was founded in 1995 by Philip Low, a PhD chemist at Purdue University, and Ron Ellis, now the company’s President and CEO. Dr. Low, with fellow Purdue chemist, Dr. Chris Leamon, worked in the late 1980s on a way to exploit the folate receptors of cells to deliver molecules within the cells. Their results were published in 1991 and began to attract investors interested in the technology. Dr. Low then joined with Ron Ellis to found Endocyte.

EC145 was invented in 2004 and entered clinical trials in 2006. The drug is currently in Phase 3 clinical trials, the only drug to ever reach phase 3 found to be effective against ovarian cancer that is resistant to platinum-based drugs.

Endocyte is also developing a companion diagnostic agent, called EC20, which is designed to predict the patient’s response to EC145. It works by replacing the actual EC145 drug payload with an imaging agent, allowing researchers to identify likely responders to the drug.

Endocyte’s IPO was on Feb. 4, 2011, with 12.5 million shares priced at $6.00. The offering was underwritten by the Royal Bank of Canada and Leerink Swann and Co. On its first day of trading Endocyte rose 29%, closing at $7.73. Initially, Endocyte proposed offering 5.35 million shares in the range of $13 to $15, later cutting the price to $7.00, with 10.7 million shares offered, before settling on the final figures.

As of July 14, Endocyte trades on the NASDAQ at $13.89.

Endocyte S-1 Form

Endocyte Website

Bloomberg

University of Cincinnati Academic Health Center

Chefs’ Warehouse Holdings, LLC IPO

Chefs’ Warehouse Holdings, LLC is a distributor of specialty food products and focuses on filling the need of chefs who own or operate independent restaurants, fine dining establishments, culinary schools and country clubs. The company was founded in 1985 and currently employs about 570 people.

Among Chefs’ Warehouse Holdings gourmet products are truffles, caviar, hormone free meat, and specialty cheeses. Operating out of Ridgefield,

Connecticut, it is a leading high end food distributor in cities such as New York, San Fransisco and Los Angeles.

Chefs’ Warehouse Holdings filed to go public in April of 2011 with an initial expected offering of 8,000,000 shares priced at $14-$16 per share. The lead underwriters are BMO Capital Markets Corp, Jefferies & Company, Inc and

Wells Fargo Securities, LLC. It will be trading on NASDAQ with the ticker symbol CHEF.

Revenues in for Chefs’ Warehouse Holdings in 2010 were $330 million with net income at $15.87 million and a one year sales growth of 21.8%.

Learn more, click here:

Chefs’ Warehouse Holdings, LLC S-1/A Form

Chefs’ Warehouse Holdings, LLC

MSN Money Central

American Midstream Partners, LP IPO

American Midstream Partners L.P is a Limited Partnership based in Denver, Colorado. It was formed in 2009 to purchase, develop and operate natural gas energy assets. It operates approximately 1400 miles of pipeline that gathers and transports over 500 MMcf/d of natural gas. The primary locations are Alabama, Louisiana, Mississippi, Tennessee and Texas.

The Initial Public Offering will be 3.75 million units with an estimated cost of $19-$21 per share. Based on this range, American Midstream Partners expects to raise $75 million. The underwriters have the option to purchase an additional 562,500 units in the event of over-allotments.

The funds raised are for purposes including debt repayment. In the first quarter of 2011, the company’s loss increased to $3.4 million, as opposed to $1.4 million a year previously. This was due to an unrealized loss on derivatives and an increase in operating costs.

The S-1 form was filed on July 15th with the United States Securities and Exchange Commission.The IPO is being underwritten by Citi and BofA Merrill Lynch, and will be listed on the New York Stock Exchange with the symbol AMID.

For more information, click here:

American Midstream Partners, LP S-1/A Form

American Midstream Partners, LP

MarketWatch – The Wall Street Journal Digital Network