Perhaps it's the Presidents Day-abbreviated week, or maybe the financial world is taking a breather from the heavy pace of new stock issues so far this year. Whatever the reason, this week is going to be fairly quiet on the IPO front. But this restless market for new issues never truly sleeps, so between now and the weekend there's a new stock coming to the exchange, plus a pair of recent IPO filings backed by serious financial players.
Before we dive in, however, we have to issue a warning -- IPO investing carries above-average risk, because initial stock prices can be far from the value the market eventually puts on the company's shares. Of course, this situation provides immense upside potential ... though it also presents the chance of losing a big chunk of an investment.
So, on to the latest and greatest.
Sundance Energy Australia
From across the Pacific Ocean comes this oil and gas company, which concentrates on the exploration, development, and production of those two resources, with heavy emphasis on the former. Although Down Under is its home, Sundance sensibly concentrates its resources and efforts on American energy plays such as the massive Bakken formation across North Dakota and Montana, and Texas' Eagle Ford. As of last September, the company's production averaged around 3,855 barrels of oil equivalent per day, its gross acreage was just over 191,000, and its net acreage was slightly more than 62,500. Over the past three years its bottom line has fluctuated, at times dramatically, but in the first nine months of 2013 its revenues nearly doubled. Already listed in its home country, Sundance plans to float 7.75 million American depositary shares on the Nasdaq under the ticker symbol SNDE at $16.50 to $18.50 per ADS. The lead underwriters are Wells Fargo (WFC 1.85%) Securities, Canaccord Genuity, and UBS Investment Bank. The ADSes are slated to begin trading publicly on Friday.
Private-equity heavyweight Carlyle Group (CG) is the owner of this specialty chemicals firm, having bought it for $1.5 billion in 2007 and now looking to exit its investment via an IPO. PQ Holdings has three business lines -- inorganic performance chemicals, catalysts, and glass materials -- and says it holds either the No. 1 or No. 2 position in 90% of its products. The company's business seems very steady, although that means sales that have largely been stagnant at the $1 billion level over the past few years, and thin or negative net margins. Carlyle has drafted an underwriting syndicate led by a trio of big guns, namely Bank of America (BAC 1.40%) Merrill Lynch, JPMorgan Chase (JPM 1.14%) unit J.P. Morgan, and Credit Suisse. The IPO will seek to raise up to $450 million, and the shares should trade under the symbol PQH, although a stock exchange has not yet been identified, nor has a flotation date been scheduled.
La Quinta Holdings
On the heels of its high-profile IPO of iconic hotelier Hilton Worldwide Holdings last December, financial-services powerhouse Blackstone Group (BX) is looking to shed its stake in this budget hotel operator. It took the firm private in a 2006 deal to the tune of $3.4 billion. These days La Quinta is one of the biggest players on the modest end of the U.S. market, boasting more than 830 hotels around the country. Its revenues have sloped higher every year from 2010 to 2012, and those for the first nine months of 2013 are showing a pleasant 7% year-over-year gain. The bottom line, however, is choppy, and that Hilton IPO hasn't been a big winner (the shares were floated at $20 apiece and currently trade only $2 or so higher). The La Quinta issue aims to raise up to $100 million, although no potential ticker symbol, exchange, or IPO date has yet been specified. The lead underwriters of the issue are JPMorgan Chase and Morgan Stanley.