3 Key IPOs For the Week Ahead (ANGI, DLPH, MFRM)

The coming week might feel a bit like a return to normalcy as far as securities offerings are concerned.  We are actually set to have several IPOs and we have flagged three of the IPOs we will be watching the closest of the lot.  First is Angie’s List Inc. (NASDAQ: ANGI), followed by Delphi Automotive Plc. (NYSE: DLPH) and then Mattress Firm Holding Corp. (NASDAQ: MFRM). None of next week’s IPOs were actually a part of our own watch list of The Top 17 IPOs of 2011.

Angie’s List Inc. (NASDAQ: ANGI) is a customer review website that allows customers to post reviews on contractors and service providers such as roofers, plumbers, house cleaners, dentists, and more.  It actually lists 550 service categories and companies cannot pay to be on a list.  It even offers an “exclusive discounts” so it has a Groupon-lite aspect to its business model.

The company is selling 6,250,000 shares of common stock and the selling stockholders (including management) are selling an 2,543,408 shares of common stock in a price range of $11.00 to $13.00 per share. BofA/Merrill Lynch is the book-runner, and there are 7 co-managers: Allen & Company, Stifel Nicolaus Weisel, RBC Capital Markets, Janney Montgomery Scott, Oppenheimer, ThinkEquity, and CODE Advisors.  The syndicate has an overallotment option for up to 1,319,011 shares.

Angie’s List is one of those companies we would have originally looked at and asked, “Why does this company need to be public other than to create liquidity and wealth for founders and investors?”  Apparently, that is just not the case because it has grown so much and covers such a vast array of services now.  It boasts more than 1 million paid memberships now.

In 2010 and the , our revenue was $59.0 million and its net loss was -$27.2 million; during the nine months ended September 30, 2011, revenue was $62.6 million and its net loss was -$43.2 million.  One consideration is that the company has incurred net losses since inception and as of September 30, 2011 it had an accumulated deficit of -$160.6 million.

Delphi Automotive Plc. (NYSE: DLPH) is an auto-parts maker that has come out of bankruptcy and will be a key IPO to watch.  Its former self was once public.  The IPO is for 24,078,827 shares of common stock and the price range is $22.00 to $24.00 per share.

The joint book-runners are Goldman Sachs and J.P. Morgan, but other co-lead managers in the syndicate are BofA Merrill Lynch, Barclays Capital, Citigroup, Deutsche Bank, and Morgan Stanley.  There are also 11 co-managers listed as well.  The overallotment option is for 3,611,824 shares of common stock.

This components maker is into electrical and electronic, powertrain, safety and thermal technology systems and solutions to the 25 largest automotive original equipment manufacturers in the world. It operates 110 manufacturing facilities and 15 major technical centers.

For the nine months ended September 30, 2011, revenue was $12.1 billion, net income was $911 million, and EBITDA was $1.589 billion.  Gross margin was 16.3% and EBITDA margin was 13.1%.

Mattress Firm Holding Corp. (NASDAQ: MFRM) is a bedding retailer, which you have almost certainly driven past one of its stores if you live in a major city.  The company is selling 5,555,555 shares of common stock and the existing range is $17.00 to $19.00 per share.  The underwriters are Barclays, UBS, and William Blair and the syndicate has an overallotment option to sell an additional 833,333 shares at the IPO price.

In fiscal 2010, net sales, Adjusted EBITDA and net income were $494.1 million, $57.1 million and $0.3 million, respectively. During the first half of 2011, sales, Adjusted EBITDA and net income were $331.8 million, $34.7 million and $4.7 million, respectively.

The company’s quote says it all as far as what the expansion opportunity is, “The market is highly fragmented, with no single retailer holding more than a 7% market share and the top eight participants accounting for approximately one quarter of the total market.”


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