Generac Holdings IPO Disappoints

NEW YORK (Reuters) – Private equity-backed generator company Generac Holdings Inc (GNRC.N) priced shares in its initial public offering below the expected range and sold fewer shares than anticipated on Wednesday, according to an underwriter.

The Wisconsin-based company sold 18.75 million shares for $13 each, raising about $243.8 million. It had planned to sell 20.3 million shares for between $15 and $17 each after raising the expected value of its IPO in late January.

Generac, which makes generators fueled by natural gas, liquid propane, gasoline, and diesel, was bought by a group led by private equity firm CCMP Capital LLC in 2006. It sells generators to consumers as well as industrial clients such as telecommunications firms.

It said in a filing with the U.S. Securities and Exchange Commission that its business is sensitive to “unpredictable major power-outage events” such as storms.

Generac had sales of $434.3 million in the nine months ended Sept. 30, up 7.5 percent from the same period a year earlier. It reported a net income of $31.1 million compared with a $40.2 million loss in the year-ago period.

The company narrowed its interest expense loss 34.1 percent to $53.7 million and nearly tripled its gain on extinguishment of debt.

It said it will use proceeds from the IPO to pay down debt and to pay fees and expenses associated with its IPO.

JP Morgan and Goldman Sachs & Co are leading the underwriters. The underwriters have the option to purchase an additional 3 million shares.

Generac is expected to begin trading on the New York Stock Exchange on Thursday under the symbol “GNRC.” (Reporting by Clare Baldwin in New York, editing by Matthew Lewis)

Leave a Reply

PEHUB Community

Join the 12505 members of peHUB to make connections, share your opinion, and follow your favorite authors.

Join the Community

Look Who’s Tweeting

PE HUB News Briefs

RSS Feed Widget

VCJ Headlines (subscribers only)

RSS Feed Widget

Buyouts Headlines (subscribers only)

RSS Feed Widget

Reuters VC and PE feed

RSS Feed Widget