IPO Preview: American Homes 4 Rent

| About: American Homes (AMH)

Based in Malibu, CA, American Homes 4 Rent (NYSE:AMH) scheduled a $750 million IPO with a market capitalization of $3.8 billion at a price point mid-range of $17, for Thursday, August 1, 2013.

Six other IPOs were scheduled for the week of July 29. The full IPO calendar can be found at IPOpremium.

  • Manager, Joint Managers: Goldman; BofA Merrill; J.P. Morgan; Wells Fargo Securities
  • Co Managers Citigroup; Credit Suisse; FBR; Jefferies; Raymond James


AMH is a single family REIT. The market has not been kind to single family REITs this year. For example, Colony American Homes was withdrawn in June and American Residential Properties (NYSE:ARPI) has performed poorly. ARPI IPOs at $21 May 8, 2013 and now trades around $17.20.


Valuation Ratios

IPO Mrkt

Price /

Price /

Price /

Price /

% offered

annualizing Q1 '13

Cap (MM)





in IPO

American Homes 4 Rent







American Residential Properties








Total capitalization: $2.4 billion, page 64 with exclusions

But on page 65 "pro forma net tangible book value as of March 31, 2013 attributable to common shareholders would have been $3,236.0 million"

Total capitalization is always equal to or greater than 'proforma net tangible book value' so there appears to be some inconsistency in the total capitalization and pro forma net tangible book value that is not clearly explained in the SEC filing.


Avoid the ARPI IPO. It's priced at a book value premium to ARPI and there is an inconsistency in the SEC filing.

To put the above conclusions and observations in context, the following is reorganized, edited, and summarized from the full S-1 referenced below:

Use of proceeds

AMH expects $711 million from its IPO plus $50 million from a concurrent private placement.

Proceeds will be paid to the operating partnership. AMH itself is a shell company hoping to get dividends from the operating partnerships, to repay $750 million in debt.

Disclaimer: This AMH IPO report is based on a reading and analysis of AMH's S-1 filing, which can be found here, and a separate, independent analysis by IPOdesktop.com. There are no unattributed direct quotes in this article.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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