IPOs on tap include: Swift Holdings (SWFT), RigNet (RNET), FleetCor Technologies (FLT). Nine others scheduled for the week of December 13 total $2.26 billion
Swift Holdings (SWFT): A $943 million IPO with a market cap of $1.8 billion at the price range mid-point of $14. Scheduled for Wednesday, December 15, 2010.
SWFT is overpriced with a negative price to earnings ratio of –17. Competitors have positive, much higher P/E multiples: Werner Enterprises (WERN), 22; Knight Transportation (KNX) 28; Heartland Express (HTLD), 24.
The company has consistently lost money over the past three years, has a negative tangible net worth, interest expenses about the same as operating income, and low operating profit margin compared to others mentioned in the SEC filing. It is trying to sell 53% of the company in the IPO.
SWFT Valuation Metrics
Largest truckload carrier in North America. As of March 31, 2010, the company operated 12,500 company-owned tractors, 3,700 owner-operator tractors, 49,400 trailers, and 4,300 intermodal containers from 35 major terminals and multiple other locations strategically positioned throughout the United States and Mexico.
Top fifteen customers by revenue in 2009 included Coors (TAP), Costco (CSOT), Dollar Tree (DLTR), Georgia-Pacific, Home Depot (HD), Kimberly-Clark (KMB), Lowe's (LOW), Menlo Logistics, Procter & Gamble (PG), Quaker Oats, Ryder Logistics, Sears (SHLD), Target (TGT), and Wal-Mart (WMT).
SWFT’s goals are to grow revenue in excess of 10% annually over the next several years and increase profitability.
Use of proceeds: $888 million to repay debt.
FleetCor Technologies (FLT) is a $311 milliion IPO with a market cap of $2 billion at the price range mid-point of $24.50. Scheduled for Wednesday, December 15, 2010
FLT is attractively priced at the price range mid-point. With a P/E of 16, It’s priced at a discount to the closest comparable Wright Express (WXS) which has a P/E of 21 based on annualized earnings for the nine months ended September 2010. Visa (V) and Mastercard (MA) are also broad comparables with P/E's respectively of 21 and 16.
FLT's revenue is up 27% and earnings up 40%, for the nine months ended September 30, 2010 compared to the year earlier period
FLT Valuation Metrics
FLT provides specialized payment products and services to commercial fleets, major oil companies and petroleum marketers. Serves more than 530,000 commercial accounts in 18 countries in North America, Europe, Africa and Asia. The company had 2.5 million commercial cards in use during the month of December 2009.
Through a proprietary payment network, FLT cards are accepted at 83,000 locations in North America and Europe. In 2009, the company processed $14 billion in purchases on FLT’s proprietary networks and third-party networks.
Primary independent fleet card competitors are Wright Express Corporation, Comdata Corporation and U.S. Bank Voyager Fleet Systems Inc. in North America and Arval U.K. Group Limited (a subsidiary of BNP Paribas) internationally.
Use of proceeds: $6.3mm from sale of 460,000 shares: $3.1 million to repay debt, balance for working capital. Shareholders intend to sell 12.2 million shares, 96% of the IPO.
RigNet (RNET) is a $75mm IPO with a $213mm market cap at the price range mid-point of $15. Scheduled for Wednesday, December 15, 2010
RNET’s revenue is up 13% to $69mm for the nine months ended September 30, 2010, compared to the year earlier period, comparable EBIDTDA is down $2mm to 30%. GNET generated only 12% operating income for the nine months ended September 30, 2010. Low grade & score: C and 6
RNET Valuation Metrics
RNET is a data network infrastructure provider serving the remote communications needs of the oil and gas industry. It provides turnkey solutions to simplify the management of communications services, freeing customers to focus attention on their core drilling and production operations.
The company uses a controlled and managed Internet Protocol/Multiprotocol Label Switching global network. Through this, RNET delivers voice, data, video and other value-added services such as real-time management and telemedicine services, under a multi-tenant model.
Primary global competitors include CapRock Communications, Inc., recently acquired by Harris Corporation, Schlumberger Ltd’s (SLB) Global Connectivity Services division. Harris Corporation recently announced the entry into a definitive agreement to acquire CapRock, and the Broadband Division of Inmarsat plc’s subsidiary Stratos Global Corporation.
In addition, there are a number of regional competitors in each local market. Onshore, RNET also faces competition from: Drilling instrumentation providers; living quarters companies; and other pure-play providers.
Use of proceeds: $45mm from sale of 3.3 million shares: $400,000 for bonuses, balance for general corporate purposes. Shareholders intend to sell 1.7mm shares, 35% of the IPO.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.