Neff Corporation has filed with the U.S. Securities and Exchange Commission (SEC) to conduct an initial public offering (IPO). There were no terms given for the offering, but its filing is for up to $100 million in Class A common stock. The company has no plans on what market it will be listing on, but it does plan on listing under the ticker NEFF.
Source: Courtesy Caterpillar Inc.
Neff is a regional equipment rental company, focused in the Sunbelt states. The company primarily does business in nonresidential construction, oil and gas and residential construction. Renting is considered to be the core competency for Neff because it has made up 87% of its revenues for the 12 months before June. The earth-moving equipment component of the rental business makes up 54% of its original equipment costs on a fleet of 13,500 units.
Be advised that Neff has two classes of common stock, Class A and Class B. Both classes will be entitled to equally weighted — one for one — voting rights, but Class B shares will not be entitled to any economic interests. All Class B shares will be owned by a family of Wayzata companies.
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The underwriters for this offering are Morgan Stanley, Bank of America Merrill Lynch, Jefferies, Piper Jaffray and Wells Fargo Securities.
For the 12 months that ended in June, Neff generated revenues of $346.9 million. These revenues make up about half of the rental fleet’s total original equipment cost at $708.3 million within that same time.
Neff did not issue exact data for what it intends to do with the proceeds from this offering, but it has a couple main objectives. A portion of the proceeds will go to pay down principal on an outstanding second lien loan, which is scheduled to mature in 2021. Another portion will go to repay amounts outstanding for its revolving credit facility, which is scheduled to mature in late 2018. Neff does recognize that because these repayments will be happening in the first quarter, investors should expect a loss in that amount.
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