Based in Scottsdale, AZ, Colony American Homes (NYSE:CAHS) scheduled a $245 million IPO with a market capitalization of $3 billion at a price range mid-point of $12.25 for Wednesday, June 5, 2013.
Three other IPOs are scheduled for this week. The full IPO calendar is here.
- S-11A filed May 31, 2013
- Manager, Joint Managers: Credit Suisse, JPMorgan, BofA Merrill
- Co Managers: FBR, Zelman
CAHS is a single family REIT. Both single family REITs that have IPO'd fairly recently are down from their IPO price.
Notice in the valuations below that CAHS wants to IPO at a price-to-book value of 1.3, while the other recent IPOs are selling at a 1.1 price-to-book value ratio.
annualized March qtr
Colony American Homes (CAHS)
yr ended Dec 2012
American Residential Properties (NYSE:ARPI)
Silver Bay Realty Trust (NYSE:SBY)
Avoid the CAHS IPO. To put the above conclusions and observations in context, the following is reorganized, edited and summarized from the full S-1 referenced earlier:
CAHS is a single family REIT.
The portfolio consisted of 8,236 homes as of March 31, 2013, which CAHS believes is one of the largest portfolios of single-family homes in the United States.
As of March 31, 2013, CAHS's portfolio consisted of 7,059 wholly owned homes and 1,177 homes owned in a joint venture, which are concentrated in attractive sub-markets within Arizona, California, Colorado, Delaware, Florida, Georgia, Nevada and Texas, offering us significant operating efficiencies and economies of scale.
CAHS is externally managed by the Manager, a subsidiary of Colony, a leading real estate private equity firm that has established 44 investment vehicles and raised over $20 billion of equity capital since its founding in 1991.
American Residential Properties (ARPI) IPO'sdat $21 May 8, 2013, and recently traded at $19.71, down 6.1%.
Silver Bay Realty Trust (SBY) IPO'd at $18.50 December 13, 2013, and recently traded at $17.83, down 3.4%.
USE OF PROCEEDS
CAHS expects to net $224 million from its IPO.
CAHS will contribute the net proceeds of this offering to the operating partnership, which will use substantially all the net proceeds from this offering to acquire and renovate single-family homes for rental to tenants.
CAHS will use up to $9.0 million out of the net proceeds of this offering to redeem the Class A Special Units, which amount is equal to the estimated $16.5 million in unpaid distributions that will have accrued with respect to such Class A Special Units through the expected date of such redemption, offset by payments otherwise expected to be due from the Manager to the operating partnership through such date.
Disclaimer: This CAHS IPO report is based on a reading and analysis of CAHS's S-1A filing, which can be found here, and a separate, independent analysis by IPOdesktop.com. There are no unattributed direct quotes in this article.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.