The IPO Buzz: A Foursome on the Fourth Night

Rounding up the usual suspects from the hot sectors are: a Bio-IPO, a cloud computer company, a limited partnership generating cash distributions, and a retread returning to the marketplace – a company presently owned by a private equity firm. Let’s take a look at the fearless foursome.
Sight-Saving Drugs
Aerie Pharmaceuticals (AERI – proposed) is a Bedminster, New Jersey-based development-stage pharmaceutical company focusing on the discovery, development and commercialization of first-in-class therapies to treat patients with glaucoma and other diseases of the eye. Glaucoma is the world’s second leading cause of blindness, Aerie notes on its website, with medical therapies to treat the disease accounting for about $4.5 billion in annual revenues in the United States and Europe combined. Aerie has generated no revenues since its inception in June 2005, and incurred net losses totaling $73.9 million. Aerie has about 22 employees.
Underwriters plan to offer about 5.25 million shares of Aerie Pharmaceuticals at $12 to $14 each to raise about $68.3 million. The IPO is expected to trade on The NASDAQ Global Market. The joint-lead managers are: RBC Capital Markets and Stifel. The co-managers are: Lazard Capital Markets and Canaccord Genuity.
Answers in the Cloud
Endurance International Group Holdings ( EIGI- proposed) is a Burlington, Massachusetts-based provider of cloud-based solutions designed to help small- and medium-sized companies establish, manage and grow their businesses. The company serves about 3.4 million subscribers with a comprehensive and integrated suite of over 150 products and services that includes initial website design and creation, email and commerce solutions as well as more advanced offerings such as scalable and on-demand computing, security, storage and bandwidth, online marketing, mobile and productivity solutions. For the three months ended Sept. 30, 2013, Endurance estimates revenues of $130 million to $131 million and EBITDA of $47 million to $48 million, compared with revenues of $83.4 million and EBITDA of $37.7 million for the same period a year ago. Founded in 1997, the company has about 2,580 employees.
Underwriters plan to offer about 23.4 million shares of Endurance International Group at $14 to $16 each to raise about $350.9 million. The IPO is expected to trade on The NASDAQ Global Market. The joint-lead managers are: Goldman Sachs, Credit Suisse and Morgan Stanley. The co-managers are: Cowen and Company, Jefferies, Lazard Capital Markets and Wells Fargo Securities.
Diesel and Cash Distributions
Sprague Resources LP (SRLP – proposed) is a Portsmouth, New Hampshire-based limited partnership engaged in the purchase, storage, distribution and sale of refined petroleum products, including gasoline, heating oil and low-sulfur diesel. The company believes it is one of the largest independent wholesale distributors of refined products in the Northeastern United States. The company owns and/or operates a network of 14 refined products and materials handling terminals located throughout the Northeast that have a combined storage capacity of about 8.0 million barrels for refined products and other liquid materials, as well as approximately 1.5 million square feet of materials-handling capacity. Founded in 2011, the company has about 400 employees.
Note: Sprague Resources plans to pay a minimum quarterly distribution of $0.4125 per common unit ($1.65 per unit on an annualized basis).
Underwriters plan to offer about 8.5 million common units of Sprague Resources at $19 to $21 each to raise about $170 million. The IPO is expected to trade on The New York Stock Exchange. The joint-lead managers are: Barclays, J.P. Morgan and BofA Merrill Lynch. The co-managers are: BMO Capital Markets, Raymond James, Janney Montgomery Scott, BNP PARIBAS, Natixis, RBS and SOCIETE GENERALE.
The Retread
CommScope Holding (COMM – proposed) is a Hickory, North Carolina-based global provider of connectivity and essential infrastructure solutions for wireless, business enterprise and residential broadband networks. CommScope manufactures the SYSTIMAX and Uniprise brands of Enterprise infrastructure of copper Unshielded Twisted Pair cabling, connector panels, jacks and fiber optic cabling, connector panels, racking and metals. CommScope also manufactures environmentally secure cabinets for FTTN and DSL applications. For the six months ended Sept. 30, 2013, CommScope reported net income of $17 million and revenues of $1.75 billion, compared with a net loss of $11.4 million on revenues of $1.58 billion for the same period a year ago. CommScope was spun off from General Instruments in 1977. It was acquired by The Carlyle Group in October 2010 for about $2.98 billion. The company has about 12,500 employees.
Underwriters plan to offer about 38.5 million shares of CommScope at $18 to $21 each to raise $750 million. The company plans to offer about 30.8 million shares and selling shareholders plan to offer about 7.7 million shares. The IPO is expected to trade on The NASDAQ Global Market. The joint-lead managers are: J.P. Morgan, Deutsche Bank Securities and BofA Merrill Lynch. The co-managers are: Barclays, Credit Suisse, Goldman Sachs, Jefferies, Morgan Stanley, RBC Capital Markets, Wells Fargo Securities, Allen & Company, Evercore, Raymond James, Mizuho Securities, SMBC Nikko and Drexel Hamilton.
Looking into next week, the calendar has five IPOs. They are expected to raise $1.4 billion. But more names could pop onto the calendar by the time that Monday, Oct. 28, rolls around.
Stay tuned.
Disclosure: Neither the author nor anyone else on the staff has a position in any stocks mentioned, nor do we trade or invest in IPOs. The author and staff do not issue advice, recommendations or opinions.