Investing

Grand Canyon Education Sets IPO Terms (LOPE)

In an SEC filing this morning, Grand Canyon Education sets its IPO terms.  In the first indications, it looks like 10.5 million shares are being planned for sale in a range of $18.00 to $20.00 per share share.  The company has the  ticker of “LOPE” on NASDAQ.

It looks like 75% of the net proceeds will be used to pay existingshareholders in a special distribution.  Grand Canyon will spend up to $16million to repurchase an outstanding warrant and the remainder will payfor filing and offering fees and general corporate purposes.  Intoday’s volatile and weak stock market, that 75% of proceedsimmediately going out the door may get a little push-back from potentialIPO subscribers.

The company is a regionally accredited provider of online graduate and undergraduatedegree programs in education, business, andhealth care.  At December 31, 2007, enrollment was approximately 14,800students, with about 85% enrolled in online programs and62% of students pursuing master’s degrees.  Student enrollment wasapproximately 16,500 students at June 30.

Joint book-runners are Credit Suisse and Merrill Lynch& Co. (MER), and co-managers are listed as BMO Capital Markets,William Blair, and Piper Jaffray.  The underwriters will have a 30-dayoption to purchase up to 1,575,000 additional shares of common stock at the public offering price to cover over-allotments if needed.

Revenue in 2007 was $99.326 million, with net income attributable tocommon shareholders of $1.177 million.  For the first half of 2008,those figures were $70.275 million in revenue and $2.703 million netincome.

Jon C. Ogg
September 29, 2008