The average number of days in registration by companies that have completed initial public offerings on U.S. exchanges or the OTC Bulletin Board through July 2010 has fallen to 125, a sharp drop from the 2009 average of 216 days in registration. The 2009 average was no doubt exaggerated by dire market conditions, but the average over the prior 3-year period ranged from 134 to 140 days in registration.
Fifty-seven of the 81 underwritten deals that made it to market in the first seven months of this year spent over 90 days in the registration mill, roughly in line with the five-year average since 2005 whereby two-thirds of IPO issuers take at least 90 days.
Nine IPO issuers so far this year and ten last year managed to take 30 days or less to move from the initial registration filing to the final Form 424. Sixteen of these 19 companies are headquartered in China. Of the 100 issuers since January 2006 that spent 30 days or less in registration prior to the IPO, only STR Holdings, Inc. is a U.S.-based company.
The information reported herein was gathered using IPO Vital Signs, a Web-based system that includes all SEC registered IPOs, including REITs and those non-U.S. IPO filers seeking to list in the U.S. markets. IPO Vital Signs does not track closed-end funds, best efforts or non-underwritten deals, or IPO offerings for amounts less than $5 million.
Thursday, August 12, 2010
Tuesday, August 10, 2010
Merger Consideration Includes New Class of Non-Voting Shares
Grifols S.A., a foreign private issuer and Spain-based company engaged in the healthcare sector, will issue cash and newly-created, non-voting (Class B) ordinary shares in connection with the proposed merger of a wholly-owned subsidiary with Talecris Biotherapeutics Holdings Corp. Grifols registered a proposed maximum of $444.59 million of the Cl. B shares on the Form F-4 filed on August 10 (SEC file no. 333-168701).
It is a condition of the merger agreement that the non-voting shares are admitted to listing on the Spanish Stock Exchanges and are approved for listing on the NASDAQ Stock Market in the form of new American Depositary Shares (ADSs), evidenced by American Depositary Receipts. Section 8.05 of the merger agreement authorizes the parties to waive compliance with any of the conditions contained therein.
The joint proxy statement/prospectus warns there is no assurance that a market for the Cl. B shares or for the new ADSs will develop, nor that the trading value or liquidity of those securities will be equivalent or similar to the trading value or liquidity of existing (Class A) ordinary shares or the existing ADSs of Grifols.
Private equity firms Cerberus Capital Management and Ampersand Ventures formed Talecris in 2005 upon the acquisition of the Bayer Plasma Products Business Group, an indirect subsidiary of Bayer AG. The firms, which took Talecris public in an October 2009 IPO (file no. 333-144941), own 49.7% of the merger target.
It is a condition of the merger agreement that the non-voting shares are admitted to listing on the Spanish Stock Exchanges and are approved for listing on the NASDAQ Stock Market in the form of new American Depositary Shares (ADSs), evidenced by American Depositary Receipts. Section 8.05 of the merger agreement authorizes the parties to waive compliance with any of the conditions contained therein.
The joint proxy statement/prospectus warns there is no assurance that a market for the Cl. B shares or for the new ADSs will develop, nor that the trading value or liquidity of those securities will be equivalent or similar to the trading value or liquidity of existing (Class A) ordinary shares or the existing ADSs of Grifols.
Private equity firms Cerberus Capital Management and Ampersand Ventures formed Talecris in 2005 upon the acquisition of the Bayer Plasma Products Business Group, an indirect subsidiary of Bayer AG. The firms, which took Talecris public in an October 2009 IPO (file no. 333-144941), own 49.7% of the merger target.
Friday, August 6, 2010
ABS Issuers Discuss Impact of Dodd-Frank Financial Reform Act
Prior to July 22, Rule 436(g) under the Securities Act of 1933 provided nationally recognized statistical rating organizations (NRSROs) with an exemption from expert liability under the Securities Act for ratings information included in registration statements. When the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law on July 21, Section 939G of Dodd-Frank repealed Rule 436(g) of the 1933 Act.
In the MD&A section of its Form 10-Q filed on August 6, American Express Co. notes this circumstance is of particular significance in offerings of asset-backed securities (ABS), which require ratings disclosure that, subsequent to Dodd-Frank, can be made only with rating agency consent. Following enactment of Dodd-Frank, the three principal NRSROs announced that they would not consent to the inclusion of their ratings in registered public offerings of securities.
In order to facilitate a transition for asset-backed issuers, the SEC Division of Corporation Finance issued a no-action letter on July 22 to temporarily allow ABS issuers to omit the credit rating disclosure required under Regulation AB (see Ford Motor Credit Co., WSB File No. 0726201001). Items 1103(a)(9) and 1120 of Reg AB require disclosure of whether an issuance or sale of any class of offered ABS is conditioned on the assignment of a rating by one or more rating agencies. The disclosure of a rating in a registration statement now requires the consent of a rating agency to be named as an expert. The no-action position will expire with respect to any registered offerings of ABSs commencing with an initial bona fide offer on or after January 24, 2011.
Ally Financial Inc. (formerly GMAC Inc.) notes in the Risk Factors section of its Form 10-Q filed on August 5 that NRSROs have refused to permit their ratings to be used pending more clarity related to potential legal exposure. Ally also notes it is unclear whether the SEC will extend the six-month period to omit credit ratings from ABS registration statements. Ally states that if the repeal of Rule 436(g) stands without further action, it would likely be limited to only private securitizations, which could have an adverse impact on its liquidity and cost of funds. American Express also indicates it may have to rely on private offerings to raise funding through its ABS program.
In the MD&A section of its Form 10-Q filed on August 6, American Express Co. notes this circumstance is of particular significance in offerings of asset-backed securities (ABS), which require ratings disclosure that, subsequent to Dodd-Frank, can be made only with rating agency consent. Following enactment of Dodd-Frank, the three principal NRSROs announced that they would not consent to the inclusion of their ratings in registered public offerings of securities.
In order to facilitate a transition for asset-backed issuers, the SEC Division of Corporation Finance issued a no-action letter on July 22 to temporarily allow ABS issuers to omit the credit rating disclosure required under Regulation AB (see Ford Motor Credit Co., WSB File No. 0726201001). Items 1103(a)(9) and 1120 of Reg AB require disclosure of whether an issuance or sale of any class of offered ABS is conditioned on the assignment of a rating by one or more rating agencies. The disclosure of a rating in a registration statement now requires the consent of a rating agency to be named as an expert. The no-action position will expire with respect to any registered offerings of ABSs commencing with an initial bona fide offer on or after January 24, 2011.
Ally Financial Inc. (formerly GMAC Inc.) notes in the Risk Factors section of its Form 10-Q filed on August 5 that NRSROs have refused to permit their ratings to be used pending more clarity related to potential legal exposure. Ally also notes it is unclear whether the SEC will extend the six-month period to omit credit ratings from ABS registration statements. Ally states that if the repeal of Rule 436(g) stands without further action, it would likely be limited to only private securitizations, which could have an adverse impact on its liquidity and cost of funds. American Express also indicates it may have to rely on private offerings to raise funding through its ABS program.
Wednesday, August 4, 2010
Carlyle Private Equity Firm Sponsors Prospective IPOs
UCI International, Inc. Form S-1 filed on 7/27/10 (SEC file no. 333-168336):
UCI was formed at the direction of The Carlyle Group ("TCG") in 2006 as the holding company of United Components, Inc., a supplier to the vehicle replacement parts market. United had acquired all of its then-existing operating units in June 2003 for a purchase price of $808 million. The acquisition was financed through a combination of debt and $260 million in cash contributed through Carlyle limited partnerships. UCI proposes a $200 million IPO in an underwritten deal led by Merrill Lynch and Deutsche Securities.
Booz Allen Hamilton Holding Corp. S-1 filed on 6/21/10 (SEC file no. 333-167645):
Booz Allen Hamilton Inc. completed the separation of its U.S. government consulting business from its commercial and international consulting business, the spin off of the commercial and international business, and the sale of 100% of its outstanding common stock to Booz Allen Holding, which was majority owned by Carlyle, in July 2008. The Registrant is the successor to the government business of Booz Allen Hamilton following the separation. Following the spin off, Booz Allen Hamilton was indirectly acquired by TCG by merger for total consideration of $1,828 million. The merger and spin-off agreements are Exhibits 2.1 and 2.2, respectively.
UCI was formed at the direction of The Carlyle Group ("TCG") in 2006 as the holding company of United Components, Inc., a supplier to the vehicle replacement parts market. United had acquired all of its then-existing operating units in June 2003 for a purchase price of $808 million. The acquisition was financed through a combination of debt and $260 million in cash contributed through Carlyle limited partnerships. UCI proposes a $200 million IPO in an underwritten deal led by Merrill Lynch and Deutsche Securities.
Booz Allen Hamilton Holding Corp. S-1 filed on 6/21/10 (SEC file no. 333-167645):
Booz Allen Hamilton Inc. completed the separation of its U.S. government consulting business from its commercial and international consulting business, the spin off of the commercial and international business, and the sale of 100% of its outstanding common stock to Booz Allen Holding, which was majority owned by Carlyle, in July 2008. The Registrant is the successor to the government business of Booz Allen Hamilton following the separation. Following the spin off, Booz Allen Hamilton was indirectly acquired by TCG by merger for total consideration of $1,828 million. The merger and spin-off agreements are Exhibits 2.1 and 2.2, respectively.
Monday, August 2, 2010
Biopharm Co. Offers Tradable CVRs as Part of Merger Package
In connection with a reverse triangular merger whereby Abraxis BioScience, Inc. will become a wholly-owned subsidiary, Celgene Corp. registered common stock and contingent value rights, or CVRs, on a Form S-4 dated July 29 (file no. 333-168369). Pursuant to the merger agreement, each Abraxis common share will be converted into the right to receive an upfront payment of $58.00 in cash and 0.2617 shares of Celgene common stock. The upfront payment values Abraxis BioScience at approximately $2.9 billion, net of cash.
Each Abraxis share will also receive one CVR that will entitle its holder to receive additional cash payments if certain U.S. regulatory approval milestones are achieved and/or annual net sales figures are met by certain Abraxis products. Celgene has agreed to attempt to list the CVRs on The NASDAQ Global Select Market.
The July 2008 merger (333-152690) between Fresenius Kabi Pharmaceuticals and APP Pharmaceuticals, Inc. also included CVRs with merger consideration that was otherwise all cash. The Fresenius CVRs, which are tied to the “Adjusted EBITDA” of APP, trade on NASDAQ under the symbol “APCVZ”. The September 2009 merger (333-162238) between Ligand Pharmaceuticals Inc. and Neurogen Corp offered Neurogen shareholders both equity and CVRs as consideration, but the CVRs are not listed on any exchange and are subject to general transfer restrictions.
Each Abraxis share will also receive one CVR that will entitle its holder to receive additional cash payments if certain U.S. regulatory approval milestones are achieved and/or annual net sales figures are met by certain Abraxis products. Celgene has agreed to attempt to list the CVRs on The NASDAQ Global Select Market.
The July 2008 merger (333-152690) between Fresenius Kabi Pharmaceuticals and APP Pharmaceuticals, Inc. also included CVRs with merger consideration that was otherwise all cash. The Fresenius CVRs, which are tied to the “Adjusted EBITDA” of APP, trade on NASDAQ under the symbol “APCVZ”. The September 2009 merger (333-162238) between Ligand Pharmaceuticals Inc. and Neurogen Corp offered Neurogen shareholders both equity and CVRs as consideration, but the CVRs are not listed on any exchange and are subject to general transfer restrictions.
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