This Week's IPOs: Aircastle, Evercore, GNC, InterMetro, Qimonda

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Includes: AYR, EVR, GATX, GNC, HLF, IDT, IFNNY, IMTO-OLD, MU, NTY, QI
by: Evelyn Rubin

IPOs on deck for this week include jet lessor Aircastle (NYSE:AYR), investment banking boutique Evercore (NYSE:EVR), vitamin and supplement provider GNC, VOIP infrastructure developer InterMetro Communications (ITR), and one billion plus offering, Infineon Technologies (IFX) spinoff Qimonda (QI). Red Herring notes that bankers have been quite ambitious in their attempt to price six new deals this week, just two weeks following the July 21 Nasdaq low:

Normally, it takes about six to eight weeks for the IPO market to come back after the stock market hits a bottom. That’s the time needed to take the sting out of the IPO losses and heal the wounds. Two weeks after the July 21 low isn’t long enough to generate significant interest in an IPO calendar.

Also of note, on Friday Alien Technology (RFID) pulled its IPO filing. Tim Mullaney must be relieved.

AIRCASTLE (AYR)

Business Description (from Prospectus):

We are a global company that acquires and leases high-utility commercial jet aircraft to passenger and cargo airlines throughout the world. High-utility aircraft are generally modern, operationally efficient jets with a large operator base and long useful lives. As of March 31, 2006, our aircraft portfolio consisted of 42 aircraft that were leased to 24 lessees located in 16 countries and managed through our offices in the United States, Ireland and Singapore.

Offering Details: Offering 9.09 million shares at an offering range of $21-23 per share. At mid-range, this would represent a $200 million raise. According to the prospectus, "We expect to use the net proceeds from this offering to repay approximately $143.2 million of the amount outstanding under our $750 million senior secured revolving credit facility" as well as general corporate purposes. After the offering, Fortress Investments will continue to own 80% of the company.

Underwriters:
JP Morgan, Bear Stearns, Citigroup

Financial Highlights: In 2005, the company's first full year of operations, it recorded $36 million revenue and $228k net income. In the first quarter of 2006, revenues of $33 million were substantially higher than the same quarter revenues of $2.2 million in 2005. Net income for the quarter was $11 million, compared with a $1.4 million net loss in Q1 05. For Q2, net income was $5.1 million on revenues of $42.1 million.

Select Competitors:
GE Capital Aviation Services, International Lease Finance Corp., GATX (GMT).

EVERCORE (EVR)

Business Description (from Prospectus):

Evercore Partners is the leading investment banking boutique in the world, based on the dollar volume of announced worldwide merger and acquisition transactions on which we have advised since 2001. When we use the term “investment banking boutique”, we mean an investment banking firm that does not underwrite public offerings of securities or engage in commercial banking activities. We provide advisory services to prominent multinational corporations on significant mergers, acquisitions, divestitures, restructurings and other strategic corporate transactions. Evercore also includes a successful investment management business through which we manage private equity funds for sophisticated institutional investors. We serve a diverse set of clients around the world from our offices in New York, Los Angeles and San Francisco.

Offering Details: 4 million shares at a range of $18-20 per share. At midrange, net proceeds are estimated at $62.9 million, $36 million of which is earmarked to repay creditors.

Underwriters:
Lehman Brothers, JP Morgan, Goldman Sachs

Financial Highlights: The company merged with Mexican banker Protego in May 2006, and does not have audited joint financials for the combined entity. For 2005, total revenues for the group were approximately $146 million, and net income was $3.5 million. Q1 06 revenues were $43.8 million with net income of $1.3 million; in the second quarter, total revenue is estimated at $41-43 million, with operating income in the $21-25 million range.

Select Competitors:
Citigroup (NYSE:C), Goldman Sachs (NYSE:GS), Lehman Brothers (LEH) among many others.

GNC CORP. (NYSE:GNC)

Previously on Seeking Alpha:
Market Participant writes that this looks like an unhealthy investment. See full GNC coverage.

Business Description (from Prospectus):

With our worldwide network of over 5,800 locations and our www.gnc.com website, we are the largest global specialty retailer of health and wellness products, including vitamins, minerals, herbal and specialty supplements, sports nutrition products, and diet products. We believe that the strength of our GNC® brand, which is distinctively associated with health and wellness, combined with our stores and website, give us broad access to consumers and uniquely position us to benefit from the favorable trends driving growth in our industry. We derive our revenues principally from product sales through our company-owned stores, franchise activities, and sales of products manufactured in our facilities to third parties.

Offering Details: Offering 23.5 million shares at a range of $16-18 per share. Only 9 and change million of the shares are being offered by the company. Of the $147.8 million net estimated raise, "We intend to use our net proceeds to redeem all of our outstanding preferred stock, including the liquidation preference, additional redemption price, accumulated and unpaid dividends, and related expenses."

Underwriters: Merrill Lynch, Lehman Brothers, UBS

Financial Highlights: For Q1 2006, the company recorded net revenues of $382.8 million compared to $333.3 million for the same period in 2005 and net cash provided by operating activities of $21.4 million compared to a $16.9 million loss for the same period in 2005.

Select Competitors:NBTY (NTY), Herbalife (NYSE:HLF)

INTERMETRO COMMUNICATIONS (ITR)

Business Description
(from Prospectus):

InterMetro has built a national, private, proprietary voice-over Internet Protocol, or VoIP, network infrastructure offering an alternative to traditional long distance network providers. We use our network infrastructure to deliver voice calling services to traditional long distance carriers, broadband phone companies, VoIP service providers, wireless providers, other communications companies and end users. Our VoIP network utilizes proprietary software, configurations and processes, advanced Internet Protocol, or IP, switching equipment and fiber-optic lines to deliver carrier-quality VoIP services that can be substituted transparently for traditional long distance services. We believe VoIP technology is generally more cost efficient than the circuit-based technologies predominantly used in existing long distance networks and is also easier to integrate with enhanced IP communications services such as web-enabled phone call dialing, unified messaging and video conferencing services.

Offering Details: 2.3 million shares at $8-10 range per share. At mid-range, net proceeds of $16.8 million are geared to expanding the company's business and general working capital needs.

Underwriters: Ladenburg Thalmann, Wunderlich Securities

Financial Highlights:

Our revenue increased over five-fold from $1.9 million in 2004 to $10.6 million in 2005, while our net loss decreased from $(2.7) million to $(1.1) million for the same time period. Our net loss increased from $(0.6) million for the three months ended March 31, 2005 to $(2.7) million for the three months ended March 31, 2006. Taking into account the recent acquisition of Advanced Tel, Inc. discussed below, our pro forma 2005 revenue was $18.4 million, a 10-fold increase from our 2004 revenue, and our pro forma net loss for 2005 was $(1.6) million. As of December 31, 2005, we expanded our VoIP network to 28 metropolitan statistical areas, or MSAs, enabling us to service, without using a long distance carrier, approximately 107 million end users, or 38% of the U.S. population.

Select Competition: Qwest (Q), Global Crossing (NASDAQ:GLBC), IDT (NYSE:IDT)

QIMONDA (QI)

Business Description (from Prospectus)

We are one of the world’s leading suppliers of semiconductor memory products. We design semiconductor memory technologies and develop, manufacture, market and sell a large variety of semiconductor memory products on a chip, component and module level. We began operations within the Semiconductor Group of Siemens AG, whose roots in semiconductor R&D and manufacturing date back to 1952, and operated as the Memory Products segment of Infineon Technologies AG since its carve-out from Siemens AG in 1999. In each of the past five years, we captured between 9% and 15% of the worldwide DRAM market based on revenues, according to industry research firm Gartner. Although our market share fluctuates, and we may lose market share quarter-to-quarter or year-to-year as we did in the fourth quarter of the 2005 calendar year and in 2005 overall, in each of those five years, we remained among the four largest DRAM suppliers worldwide based on revenues. For the first time in the quarter ended March 31, 2006, we were the world’s second largest supplier of DRAM by revenue, with a market share of approximately 17%, according to Gartner.

Our principal products are DRAM components and modules for use in a wide range of electronic products. Our DRAM products include standard DRAMs for use in personal computers, notebooks and workstations as well as a growing range of technologically more advanced DRAMs for use in infrastructure, graphics, mobile and consumer applications. Our infrastructure DRAMs address the high reliability requirements of servers, networking and storage equipment, our graphics DRAMs deliver advanced performance to graphics cards and game consoles, and our mobile and consumer DRAMs provide low power consumption benefits to mobile phones, digital audio players, televisions, set-top boxes, DVD recorders and other consumer electronic devices. We also have a small NAND-compatible flash memory business and are focusing on research and development in this area.

Offering Details: 62 million ADSs, 21 million of which are being offered by Infineon. With a range of $16-18 per ADS, the company expects net proceeds of $684 mid-range, largely geared to expanding manufacturing capacity. At $17, the total offering would be more than $1 billion.

Underwriters: Credit Suisse, Citigroup, JP Morgan

Financial Highlights: 2005 revenues were just $3.4 billion, with net income of $22 million. For the first half of 2006, revenue was $1.95 billion with a net loss of $165 million.

Select Competitors: Samsung Electronics, Hynix, Micron (NASDAQ:MU), Elpida, Nanya.

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