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Here is a list of upcoming IPOs for the week of October 22, 2012:

WhiteWave Foods

  • Symbol: WWAV
  • Price: $14-$16
  • Shares: 20 million Class A
  • Expected: October 26
  • Underwriter Option: 3 million additional Class A shares

WhiteWave (WWAV) is a division of Dean Foods (DF). The company is spinning off the division to unlock value.

WhiteWave "develops, manufactures, markets and sells a variety of nationally branded dairy and dairy-related products, such as Horizon Organic milk and other dairy products, International Delight coffee creamers and LAND O LAKES creamers and fluid dairy products, and Silk plant-based beverages, such as soy, almond and coconut milks, and cultured soy products. WhiteWave-Alpro also offers branded plant-based beverages, such as soy, almond and hazelnut drinks, and food products in Europe and markets its products under the Alproand Provamel brands."

After the spin-off Dean will hold 150 million Class B shares, which have 10 votes per share as opposed to Class A, which have 1 vote per share. At an IPO price of $15, WhiteWave would command a market capitalization of over $2.55 billion.

The best way to play this IPO is to buy shares of Dean, which are undervalue based on the price of WhiteWave. At a $16 IPO, the rest of Dean would be worth just $700 million even though it contributes to more than 50% of profitability.

Check out their S1 filing here.

Lehigh Gas Partners LP

  • Symbol: LGP
  • Price: $19-$21
  • Shares: 6 million
  • Expected: October 26
  • Underwriter Option: 900,000 additional

Lehigh (LGP) is a wholesale distributor of motor fuel. They charge "either a fixed mark-up per gallon or variable rate mark-up per gallon." They also own and rent out gas stations.

After the spin-off, the public will own from 6 million to 6.9 million common units. The Topper Group and Lehigh Gas Corporation will own 7.525 million subordinated units and .625 million to 1.525 million common units. The common units have first right to dividend payments.

The company is a limited partnership and expects to pay out all cash flow to unit holders. The company expects to pay a minimum of $1.75/share annually.

This IPO is structured almost identical to the Susser Petroleum (SUSP) IPO. Both IPOs are in the same line of business, offer the same dividend ($1.75), and the same terms for conversion of the subordinated notses. SUSP was priced at $20.50 and is currently trading at $25.

Although, I believe there will be a pop in the shares, investors should be cautious:

  • Lehigh is a more leverged than SUSP
  • Based on their 2013 projections, their rental income is negative (free cash flow is positive because of depreciation).
  • LGO, an entity managed by Joseph V. Topper, Jr, the Chief Executive Officer and the Chairman of the board of directors of our general partner, is leasing or sub-leasing 182 sites from the company at an aggregate initial annual rent of 3.8 million. That is $20,0000 per site. This seems really low because each site is worth around $1 million. Yearly maintenance for each site is probably around $20,000.

Check out their S1 filing here.

MPLX LP

  • Symbol: MPLX
  • Price: $19-$21
  • Shares: 15 million
  • Expected: October 26
  • Underwriter Option: 2.25 additional

MPLX (MPLX) is a "fee-based, growth-oriented limited partnership recently formed by Marathon Petroleum Corporation (MPC) to own, operate, develop and acquire crude oil, refined product and other hydrocarbon-based product pipelines and other midstream assets."

After the spin-off, the public will own 15 to 17.25 million common units. MPC will own the rest, 19,701,515 to 21,951,515 common units, 36,951,515 subordinated units, and 1,508,225 general partner units. The common and general partner units have first right to dividend payments. The public will have around 20% ownership.

The company is a limited partnership and expects to pay out all cash flow to unit holders. The company expects to pay a minimum of $1.05 annually.

At only a 5% dividend, I am going to skip out on this IPO.

Check out their S1 filing here.

Source: Upcoming IPOs: WhiteWave Foods, Lehigh Gas Partners, MPLX