This Week's IPOs: Burger King, Darwin Professional Underwriters, Penson Worldwide (BKC, DR, PNSN)

by: Jon Ogg

This is not an extremely busy week in IPO-land, but we have a key IPO and there is of course always plenty of news and many developments worth looking at.

The largest IPO and the one the street has its eye on is of course Burger King Holdings that will trade under the ticker BKC. It is presumable that if you haven't been locked up for thirty years and that if you are reading this that you already know they are one of the top fast food and burger interests in the US and abroad. The underwriting group is lead by J.P.Morgan and the co-manager group is quite large: Citigroup, Goldman Sachs, Morgan Stanley, Wachovia, Bear Stearns, CSFB, Lehman, and Loop Capital Markets.

Burger King is offering 25M shares with an indicated price range of $15.00 to $17.00, and it will have an implied market cap of approximately $2.1 Billion. This sale will represent a 19% stake being sold and is currently controlled by private equity firms Texas Pacific Group, Bain Capital and Goldman Sachs after the group purchased it in 2002 for about $1.5 billion from British drinks company Diageo Plc. Its most recent 12-month implied financial data showed revenues at $2.018B with net income of approximately $119M, but the 9-month bottom-line posted an actual decline of about 18% on what was said to be in-part a $14M loss.

We also have Darwin Professional Underwriters (DR), which offers Medical Malpractice, Errors & Omissions, and Directors & Officers insurance products. Its most recent 12-month financials showed $101M revenues with approximately $6M net income. As of now it is projected to sell 5.2M shares at a range of $15.00 to $17.00 per share from the following underwriters: Leaders are Merrill Lynch and CSFB; co-managers are Dowling & Partners, Cochran Coronia, and Keefe Bruyette Woods.

Penson Worldwide is also set to come public this week under Nasdaq ticker PNSN. Penson provides securities clearing and related services to broker/dealers and institutions. The joint book-runners are J.P.Morgan and CSFB, with Bank of America, Raymond James and Sandler O'Neill acting as co-managers. PNSN is proposing 7.5M shares at a price range of $15.00 to $17.00 per share. Its most recent implied 12-month financial data showed revenues of $146M with approximately $7M net income.

Restore Medical is also on the IPO docket, and will trade under the Nasdaq ticker REST. It manufactures a proprietary palatal implant system, which is an implantable medical device that treats sleep disordered breathing. The company is only selling 4M shares at a proposed range of $9.00 to $14.00. The company's website says that its sleep apnea and snoring solution is FDA-cleared and clinically proven, with results comparable to more aggressive surgical procedures.

Other Developing IPO Stories

Quatrx Pharmaceuticals (Nasdaq: QTRX) is still day-to-day on last look, so there is no assurance it will price this week. They are a research-stage developer of drugs in the endocrine, metabolic and cardiovascular therapeutic areas that has no revenues as of yet. It has indicated that it will sell 6M shares in a pricing range of $11.00 to 413.00 per share. The underwriting group has Bank of America and Cowen as joint book-runners with Lazard and pacific Growth as co-managers.

We also saw a newly-formed blank check company Marathon Acquisition Corp. register to come public via an IPO on the American Stock Exchange under the proposed ticker (Amex: MAQ). It seeks to operate in "various industries in the US and Western Europe." Citigroup and Ladenberg Thalmann have been listed as the proposed joint book-runners. It is a proposed offering of 37.5 million units of up to $330M total, with each unit consisting of one share and one warrant. Usually these companies come under heavy scrutiny, but Marathon is controlled by former Apollo investment CEO Michael Gross. The offering prospectus indicated that he currently serves on several boards of directors of public companies, including Apollo Investment Corporation, Saks, Inc. and United Rentals, Inc., and in the past has served on the boards of directors of more than 20 public and private companies. Two additional directors listed are Adam Aron, former CEO of Vail Resorts, and Martin Franklin of Jarden Corp.

CTC Media (proposed as Nasdaq: CTCM), which operates two Russian television networks that offer entertainment programming, announced the terms for its upcoming IPO on Friday. According to the SEC filing, the Moscow-based media company plans to offer 29.4M shares at a range of $16.00 to $18.00 per share and will have an estimated market cap of $2.5 Billion. Joint book-running managers Morgan Stanley and Deutsche Bank have yet to announce a pricing date for this IPO.

Friday after the close, software provider Activant withdrew its proposed IPO because of a merger.