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Two new Enterprise IT IPOs are scheduled to trade the week of June 24th. The full IPO calendar is at IPOpremium. Trial and paid and trial subscribers get early, complete financial analysis.

CDW Corp (CDW), $600 million IPO

Based in Vernon Hills, IL, CDW Corp scheduled a $600 million IPO with a market capitalization of $3.6 billion, at a price range mid-point of $21.50 for Thursday, June 27, 2013.

  • S-1 filed June 14, 2013
  • Manager, Joint Managers: J.P. Morgan; Barclays; Goldman
  • Co-Managers: Deutsche; Morgan; Baird; BofA Merrill; Raymond James; William Blair; Needham; Stifel; Loop Capital; Williams Capital

Summary

As a systems integrator, CDW supplies software and hardware to a large customer base. Gross margins are very low, 17%, which suggests there is not a lot of "value-add" in their offerings.

Revenue was up only 4% for Q1 '13 vs. Q1 '12 to $2.4 billion. Based on pro formas earnings can't be compared.

Valuation

Valuation Ratios

IPO Mrkt

Price /

Price /

Price /

Price /

% offered

annualizing proforma adj Q1

Cap (MM)

Sls

Erngs

BkVlue

TanBV

in IPO

CDW Corp

$3,623

0.4

31.2

6.0

-1.2

17%

2012 proforma earnings (seasonal, Q4 is high)

20.6

Glossary

Valuation comparisons

Valuation Ratios

IPO Mrkt

Price /

Price /

Price /

Price /

Gross

2012 results (seasonal, Q4 is high)

Cap

Sls

Erngs

BkVlue

TanBV

Margin %

CDW Corp

$3,623

0.4

20.6

6.0

-1.2

17%

Accenture (ACN)

$56,810

1.9

19.7

10.4

14.2

30%

Wipro Limited (WIT)

$19,920

3.3

19.9

4.2

5.3

30%

Super Micro Computer (SMCI)

$472

0.4

25.8

1.3

1.3

16%

Conclusion

CDW appears to be priced about right, give the valuation comparisons. A negative is the 4% revenue growth for Q1 '13 vs. Q1 '12. The rating is neutral.

Luxoft Holding (LXFT), $70 million IPO

Based in Moscow, RU, Luxoft Holding scheduled a $70 million IPO with a market capitalization of $554 million, at a price range mid-point of $17 for Wednesday, June 26, 2013.

  • F-1A filed June 12, 2013
  • Manager, Joint Managers: UBS; Credit Suisse; J.P. Morgan
  • Co-Managers: VTB Capital; Cowen

Summary

LXFT is a leading provider of software development services and innovative IT solutions

Although based in Moscow, during Q1 '13 LXFT derived 45.6% of sales from clients located in Europe, 42.0% from clients in North America, and 12.4% from clients in other geographies.

Revenue increased 16% to $315 million for fiscal 2013 (ended March) vs. fiscal 2013. Net income increased only 3%.

Valuation

Valuation Ratios

IPO Mrkt

Price /

Price /

Price /

Price /

% offered

12 mos ended March 31, '13

Cap

Sls

Erngs

BkVlue

TanBV

in IPO

Luxoft Holding

$554

1.8

15.4

5.8

8.9

13%

Glossary

Corporate taxes: LXFT pays 9%, about the same as CA, lower than BMC & EPAM

COMPARE

Valuation Ratios

IPO Mrkt

Price /

Price /

Price /

Price /

Profit

12 mos ended March 31, '13

Cap

Sls

Erngs

BkVlue

TanBV

Margin %

CA, Inc. (CA)

$12,780

2.8

13.4

2.3

-8.2

21%

Luxoft Holding

$554

1.8

15.4

5.8

8.9

11%

EPAM Systems (EPAM)

$1,200

2.7

17.9

4.0

4.6

15%

BMC Software (BMC)

$6,500

3.0

19.6

7.9

-4.8

15%

Recommendation

LXFT appears to be priced within the valuation range and the rating is neutral.

Disclaimer: These CDW, LXFT summary IPO reports are based on a reading and analysis of their respective SEC filings, referenced above, and a separate, independent analysis by IPOdesktop.com. There are no unattributed direct quotes in this article.

Source: 2 New Enterprise IT IPOs For June 24th Week