All three deals on the IPO calendar for this week are to begin trading today.
Allison Transmission (ALSN), which makes fully-automatic transmissions for commercial, military and transit vehicles, priced an upsized IPO at $23, the midpoint of the $22-$24 range. The IPO consisted of 26.1 million shares, 20% more than the 21.7 million originally anticipated. All of the shares being offered belong to private equity firms The Carlyle Group (CG) and Onex Corporation, and Allison Transmission will not receive any proceeds. The two firms acquired Allison Transmission in 2007 will each continue to hold 43% of shares after the offering.
In 2011, despite decreases in military and municipal spending, Allison Transmission's sales increased 12% to $2.2 billion and gross margin rose to 44%. Net income improved from $30 million to $103 million. Allison Transmission Holdings plans to list on the NYSE under the symbol ALSN. BofA Merrill Lynch (BAC), Citi (C), and J.P. Morgan (JPM) acted as lead managers on the deal.
Demandware (DWRE), a leading on-demand e-commerce platform for retailers and consumer brands, raised $88 million by offering 5.5 million shares at $16.00, well above the $12.50 to $14.50 range. Demandware plans to list on the NYSE under the symbol DWRE. Goldman, Sachs & Co. (GS) and Deutsche Bank Securities (DB) acted as lead underwriters on the deal.
Demandware sells its on-demand software on a subscription model, with an average three-year contract, and shares in the revenue processed on the platform. As of December 31, 2011, 101 customers were operating 361 sites, which include websites, mobile apps and other digital storefronts. Prominent customers include Columbia Sportswear (COLM), Procter & Gamble (PG), L'Oreal, Panasonic (PC) and Callaway Golf. Sales increased 54% to $57 million in 2011, as the number of customers increased 46%. The gross margin increased 5% to 65% and reached 72% in the fourth quarter. Operating income swung negative, however, and the company posted a net loss of $1 million for the year. The apparel industry provided half the total revenue and general merchandiser neckerman.de accounted for another 21%.
M/A-COM Technology (MTSI), an analog chip supplier to the networking, military and auto/industrial markets, raised $114 million by offering 6 million shares at $19, the high end of the $17-$19 range. The company had originally planned to sells 5.6 million shares, resulting in a total deal size 14% greater than originally planned. M/A-COM Technology plans to list on the NASDAQ under the symbol MTSI. Barclays Capital (BCS), J.P. Morgan (JPM), and Jefferies & Co (JEF). acted as lead managers on the deal.
M/A-COM Tech saw sales increase significantly from $25 million in fiscal year 2008 to $310 million in FY2011 before plateauing in recent quarters. The $73 million in revenue for the 4Q11 represented a 3% decrease year over year and a 7% sequential decline. Management attributed the results to weaker demand in the networks segment and the October 2011 flooding in Thailand, which affected a contract manufacturing supplier. Still, the sequential growth rates in the two prior quarters were only 1% and 0.1%. Gross margin for the fourth quarter stayed flat at 43% and operating income was $8 million.