Banking & Finance

Private Equity IPO Class of 2011: No Love For Rich Old Men (RATE, FSL, HCA, BAC, KKR, KMI, GS, VHS, BX, MTGE, ACAS, AMTG, APO, VNO, DOW)

Apollo Residential Mortgage, In (NYSE: AMTG) came public in late July at the market peak by selling 10,000,000 shares at $20.00 per share by Apollo Global Management, LLC (NYSE: APO).  This one was formed to invest in, finance and manage mortgage-backed securities, residential mortgage loans and other residential mortgage assets. Despite a recent pop, shares are still under $18.00 at this time.

AND NOW THE PENDING PRIVATE EQUITY-BACKED IPOs IN WAITING…

Allison Transmission Holdings, which is effectively owned and backed by Carlyle and Onex Corporation makes automatic truck transmissions could be for up to $750 million.

Avaya, the telecom equipment giant, filed to sell up to $1 billion and this was acquired by TPG and Silver Lake during the private equity boom for over $8 billion.

Momentive Performance Materials is one of the larger IPOs at more than $800 million in the “up to” section of the filing and it is owned by Apollo Management It is the spawn of what Hexion Specialty Chemicals and Momentive have been combined for.

Party City was filed as being up to $350 million in the share sale and it should get a solid reception if it avoids a complicated structure and avoids a low-float that leaves a huge overhang. Advent International is the key holder along with Berkshire Partners and Weston Presidio.

PetroLogistics is another private equity-backed IPO in-waiting and it makes propylene from propane.  This IPO is still said to be for up to $600 million but we have heard little.

Toys R Us was supposed to be one of our Top 17 IPOs to Watch in 2011 but all reports during and after the market conditions seem to point to a 2012 IPO now.  The problem is that selling growth is a tough sell here today.  The IPO is for up to $800 million, but it was taken private in a $6.6 billion deal about 6 years ago by Bain Capital, Kohlberg Kravis Roberts (NYSE: KKR) and by Vornado Realty Trust (NYSE: VNO).

TransUnion of Madison Dearborn and the Pritzker family is still one of the pending deals for up to $325 million.

Trinseo was filed to raise up to $400 million.  This one was formerly called Styron of Dow Chemical Company (NYSE: DOW) with Bain as top biller and more than 90% ownership and Dow as a minority holder.

JON C. OGG