IPOs to Watch in 2012

IPOs to Watch in 2012
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IPOs to Watch in 2012

By 24/7 Wall St.

BATS Global Markets, founded in 2005, first filed to become a public company in May 2011. The company, which started as an alternative to the NYSE for equities trading in Europe and the U.S., is now the third largest equity exchange in America and operates the second largest pan-European multilateral trading facility.

BATS plans to raise up to $100 million through the offering. More than 90% of the company’s revenues come from trading U.S. equities. These days, it's also a primary listing venue, meaning it can conduct IPOs. The global operator of stock and options markets plans to list its shares on its own exchange, rather than on the NYSE, under the ticker BATS. The offering will have a dual-class share structure; the bankers are listed as MorganStanley, Citigroup, and Credit Suisse.

Caesars Entertainment filed for its IPO in late 2011. This move is a holdover from the private-equity buyout days, when the company tried to go public but later retracted the offering. No exchange was specified, nor was a ticker set in the filing. As of Sept. 30, the company owned or operated 52 casinos in a dozen U.S. states and seven countries under the  Caesars, Harrah’s and Horseshoe brands, with a total gaming space of 3 million square feet and about 42,000 hotel rooms.

Caesars Entertainment is what’s left of the massive $9.3 billion buyout by Apollo Global Management (APO) and TPG in 2005. Sales in the first nine months of 2011 were more than $6.6 billion and operating income was was over $600 million, with a net loss after items of $467 million.
Private equities and casino operators are paying close attention to this IPO. If the real size of the overall company is too large, the private equity firms may consider breaking up the underlying assets into separate offerings and utilizing a ‘keiretsu’ approach to keep them loosely linked.

The Carlyle Group filed to raise up to $100 million in securities in September 2011. As one of the best-known names in the world of private equity, its IPO be one to watch for investors and other private equity companies. No ticker and no exchange were designated in the filing, but the company named J.P. Morgan, Citi, and Credit Suisse as the lead underwriters. With more than $150 billion in assets under management, this private-equity giant is a key player in real assets, global market strategies, and now also in funds of funds after buying a 60% equity interest in AlpInvest. With several private equity companies already publicly traded, Carlyle has been an IPO candidate group for years.

Facebook is a monster force in social networking, and its success has changed the way the world communicates. No question, it's going to be the king of IPOs of 2012. What is still in question: When exactly will it go public and at what price will it launch?

It was just over a year ago that many thought that $30 billion and $40 billion valuation was too high, but the many private sales of Facebook shares have since commanded much higher valuations. Now, with Mark Zuckerberg aiming for a $100 billion valuation at the offering (expected to be a $10 billion stock sale), Facebook could be valued at more than 2012's top IPOs combined. The company supposedly will release its financials in the second quarter to comply with regulatory standards, now that its number of shareholders has exceeded the 500 limit.

The underwriting firms and which exchange it will list on are as yet unknown, as is the share structure.

5. Kayak.com. It's a search engine that specializes in finding cheap flights, hotels and rental cars that automatically comparison-shops across services. Think of it as an aggregator that scans the entire Internet to find deals. Users can also set price alerts to be notified when ticket prices to their favorite destinations rise or drop dramatically. In addition, the iPhone app contains airport information, contact numbers for major airlines, tour information, and a currency exchange calculator.

Glam Media is an online media and advertising network that focuses on the female market. Glam made news late last year after reportedly speaking to investment banking firms like Goldman Sachs, MorganStanley, and BofA about going public, but the filing is not expected before mid-2012. Glam claims to have about 1,000 brand advertisers and sales of over $100 million. It acquired Ning as a custom social site design tool for somewhere around $150 million. Whether this will be a normal IPO with a single-class or a dual-class structure has yet to be revealed. That choice will depend largely on the performance of other recent media and social networking IPOs.

Gogo Inc., which filed right before Christmas, provides the in-flight connectivity, entertainment, and Internet services for several large airlines, including Delta, American, Virgin America, and US Airways. The filing was for up to $100 million, and the stock is set to trade under the ticker GOGO. Investors will have to hope that the performance of Boingo Wireless, (WIFI) doesn't hurt Gogo’s IPO value. As of Sept. 30, Gogo had equipped 1,177 commercial aircraft. Consolidated sales in the first nine months of 2011 grew 89% to $113.8 million. Lead underwriters included Morgan Stanley, J.P. Morgan and UBS. Major holders are Ripplewood Holdings, Oakleigh Thorne, and AC Partners.

GrowOp Technology is the technology provider to much of the medical marijuana growing industry. So far, it has raised capital through Form D filings. We interviewed founder Derek Peterson in 2011, when an IPO was on track to occur. But the business of supplying equipment for the growth of medical marijuana underwent quite a lot of change in the last year, which caused the company to put the 2011 IPO on hold. Other companies in the field have conducted reverse mergers, and some are hoping to raise capital, so GrowOp will be a company to watch.

LivingSocial has not yet filed for a public offering but is one of the long-standing IPO candidates. It competes directly with Groupon and claims to be the fastest growing online deal site. The company’s financials are not public, and revenue figures vary from source to source, but LivingSocial has over 34 million U.S. members more than 46 million users globally, 603 daily deal markets worldwide in 25 countries, over 22 million vouchers bought by members worldwide, and more than 3,900 employees. It was reportedly trying to raise up to $400 million in December, giving the company a projected market value of $6 billion.

Platinum Energy Solutions is not the largest of the pending oil and gas IPOs of 2012, but it's still relatively new. It's focused on the controversial hydraulic fracturing method of extracting oil and natural gas from America's domestic shale regions. The Houston-based outfit filed for an IPO of up to $300 million in common stock under the FRAC ticker on the NYSE at the end of the third quarter in 2011, with Morgan Stanley and J.P. Morgan set to lead the offering. Platinum’s customers are Petrohawk in the Eagle Ford Shale, a major independent operator in Altamont Field in Utah, and Encana Corporation in the Haynesville Shale. With fracking generating so much controversy over its potential for environmental damage, and with most operations being so new, investors (and competitors) will be paying close attention to this IPO.

There are 7 more IPOs to watch for in 2012.  Continue reading at 24/7 Wall St