Flood of Secondary Offerings Coming (AVGO, DPM, EVEP, JNPR, MOH, RGNC)
The markets are up over the last month, so companies are raising cash. The secondary offering floodgates are opening up. We have seen a wave of secondary offerings filed last night or this morning from the likes of Avago Technologies Limited (NASDAQ: AVGO), DCP Midstream Partners LP (NYSE: DPM), EV Energy Partners LP (NASDAQ: EVEP), Juniper Networks, Inc. (NASDAQ: JNPR), Molina Healthcare (NYSE: MOH), and Regency Energy Partners LP (NASDAQ: RGNC). We have outlined each with the underwriters, the size versus the market cap and added other color where appropriate.
Avago Technologies Limited (NASDAQ: AVGO) has been public barely one year, but the a fairly short period of time, yet the company just filed to sell up to 24,840,000 ordinary shares. All shares being sold are on behalf of holders rather than coming from the company via joint book-runners of Deutsche Bank Securities, Barclays Capital, Morgan Stanley and Citi. Shares were down some 3.6% at $21.50 per share in the after-hours session versus a 52-week trading range of $14.33 to $23.69.
DCP Midstream Partners LP (NYSE: DPM) has filed to sell 2.6 million common units to reduce its debt balances under its revolving credit facility. BofA Merrill Lynch, Citigroup, and Morgan Stanley will be the joint book-running managers of the offering. This comes to nearly $90 million based upon the $33.83 unit price close on Tuesday versus a market cap of $1.17 billion.
EV Energy Partners LP (NASDAQ: EVEP) filed to sell 3 million common units to fund part of the purchase price of the recently announced Mid-Continent region acquisition. Citi, Raymond James, RBC Capital Markets, Wells Fargo Securities and UBS will act as joint book-running managers in the offering. This will generate close to $100 million in proceeds versus a market cap of $959 million.
Juniper Networks, Inc. (NASDAQ: JNPR) just filed a shelf registration statement with the SEC that would allow the networking company to sell up to $1.5 billion of mixed securities. The company can sell any combination of common or preferred stock, depository shares, warrants, debt securities, and/or units. No underwriters were named, and the use of proceeds will be earmarked for for general corporate purposes… “which may include working capital, capital expenditures, other corporate expenses and acquisitions of complementary products, technologies or businesses.” Juniper’s market cap is $15 billion.
Molina Healthcare (NYSE: MOH) priced a 4 million share secondary offering of common stock at $27.00 per share versus a $27.54 close Tuesday and versus a 52-week trading range of $17.05 to $31.80. The company will reduce its borrowings under its $200 million senior secured credit facility with the proceeds, and Molina noted that this credit facility had an outstanding balance of $105 million. BofA Merrill Lynch and J. P. Morgan Securities were acting as joint book-running managers for the sale.
Regency Energy Partners LP (NASDAQ: RGNC) filed to sell 14 million common units to pay down its outstanding debt under its revolving credit facility. Morgan Stanley, BofA Merrill Lynch, Barclays Capital, Citi, Credit Suisse, J.P. Morgan, UBS, and Wells Fargo are listed as the joint book-running managers for the sale. This will generate about $345 million based on current prices versus a market cap of $2.3 billion.
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JON C. OGG