There are 4 IPO’s expected for the week of 7/12/10, Oxford Resource Partners LP (OXF), SMART Technologies Inc (NASDAQ:SMT), Qlik Technologies Inc (NASDAQ:QLIK), and RealD Inc (NYSE:RLD). All 4 look to be attracting interest: one as a yield play, and the other three as growth stories.
Oxford Resource Partners LP (OXF) is offering 8.75M common units in their IPO at $18.00-$20.00, representing a mid point market cap of $391M (expected to price Tuesday for Wednesday trade). The company, based in Columbus, OH, is one of the largest surface miners of coal in Ohio, and operates 8 mining complexes, comprised of 17 individual mines, in the Northern Appalachian and Illinois Basin. They are amongst the lowest cost producers in the region, have approximately 92 million tons of reserves, and have close to 100% of their coal sales tonnage committed for the next 2 years (97.6% in ’10, and 101.5% in ’10). The company will attract a strong retail interest due to their high estimated dividend yield of approximately 9.2% for the 12 months ending 6/30/11.
SMART Technologies Inc. (SMT) is offering 35.3M common shares in their IPO at $16.00-18.00, representing a mid point market cap of $2.1B (expected to price Wednesday for Thursday trade). The company based in Calgary, Canada is the leading provider of interactive whiteboards for classrooms and meeting rooms. The company has close to a 50% market share, with their closest competitor Promethean about ½ their size. The company has grown revenue at a CAGR of 31% from FY’08 to FY’10 to $648M from $379M, and has grown revenue at a CAGR of over 30% for the last 10 years. Though they booked a large foreign exchange gain in FY’10 (of approx $90M) they were net income positive for FY’10 and would have been without the gain. Growth prospects continue to look promising with only a 7% global whiteboard penetration rate currently, and it appears this is translating to strong early demand.
Qlik Technologies Inc. (QLIK) is offering 11.2M shares in their IPO at $8.50-9.50, representing a $675M market capitalization at the mid point (expected to price Thursday for Friday trade). The company, originated in Sweden and now headquartered in Radnor, PA, provides a new type of user driven business intelligence (BI) software that utilizes their associative technology which can scale from small business users to large enterprises. Another growth company which is also currently profitable, QLIK has experienced a revenue CAGR of 59% from ’05 to ’09 (from $24.5M to $157.4M). With many of their primary BI comps being acquired in ’07 (such as Hyperion by Oracle, Cognos by IBM, and Business Objects by SAP), QLIK will be one of the only remaining public pure-play BI companies. The company has grown their client base from 1500 in ’04 to approximately 15k currently, and they claim to add approximately 70 new clients each business day. In a market looking for profitable, growth technology companies, QLIK also looks poised for a solid debut, and early demand also is strong.
RealD Inc. (RLD) is offering 10.75M shares in their IPO at $13.00-15.00, representing a $667M market cap at the mid point (expected to price Thursday for Friday trade). Based in Beverly Hills, CA, the company is the global market leader in 3D enabled movie screens. They have over 5900 screens deployed in 51 countries with an additional 5100 under long term contracts to be installed. RealD has contracts with 17 of the 18 world’s top motion picture exhibitors, including AMC, Cinemark, ODEON, Regal, and Warner Mycal. They license their RealD systems to motion picture exhibitors through multi-year agreements, and receive royalties on every attendee of a 3D film on a RealD enabled screen. The company is also trying to leverage the success of recent 3D cinema into the large consumer electronic market. They have entered agreements to provide their RealD Format, active and passive eyewear, and display and gaming technologies to leading consumer electronics manufacturers, including Panasonic, Samsung, Sony, Toshiba, and JVC. Revenue has grown at a tremendous pace in the last year from $45M for FY end March ’09 to $189M for the same period ending FY’10. This can be attributed to the correlation of the growth in RealD enabled screens, plus the growth in the number of 3D films. While the company has yet to turn a profit, the top line growth looks to continue to run at a rapid pace, as they look to double the number of screens in the next few years (based on the additional 5100 screens already contracted) as well as the significant increase in anticipated 3D films (there were 27 3D films total from ’05 to ’09, and there are currently 55 announced 3D films for 2010 and 2011). While the lack of current profitability may deter some investors, the recent hype (with success of films such as Avatar) of 3D technology has garnered enough interest to make this a relatively hot offering. The question is will this hype be enough to ignite the stock to successful debut only to see the share sell off in the days after, ala Tesla?
We’ll see how the group performs this week, but early indications appear that this group will lead the IPO market to a successful start of the second half of 2010.
Disclosure: No positions