LPL Investments Raised $469.7 Million Via IPO – Reuters

LPL Investment Holdings Inc. sold 15.7 million shares for $30 each through an IPO, Reuters reported. LPL Investment had planned to sell 15.6 million shares and the IPO price came in at the high end of the anticipated $27-to-$30-a-share range. LPL Investment raised $469.7 million and has a market value of more than $3.2 billion. However, the Boston, Mass.-based company initially filed to raise as much as $600 million. The offering allows TPG and Hellman & Friedman to cut their equity stakes to about 32 percent each from 36.3 percent, Reuters reported. LPL Investment’s shares will change hands on Nasdaq under the “LPLA” symbol.

(Reuters) – LPL Investment Holdings Inc (LPLA.O: Quote, Profile, Research, Stock Buzz), a company that supports some 16,000 independent U.S. brokers and financial advisers, on Wednesday priced its initial public offering at the high end of its expected range as investors rallied behind General Motors and other new issues.

Underwriters said LPL sold 15.7 million shares for $30 a share, compared with its plans to sell 15.6 million shares in the range of $27 to $30 a share.

The sale raised $469.7 million, and gives this little-known brokerage firm a market value of more than $3.2 billion, based on 107.14 million shares outstanding after the IPO.

Boston-based LPL, formerly known as Linsco/Private Ledger, is an unusual company in wealth management in that it does not employ brokers. Rather it sells clearing, custody and other services to thousands of self-employed independent advisers.

The company has grown rapidly since buyout firms TPG Capital and Hellman & Friedman acquired control of LPL in 2005. The offering lets these firms reduce their equity stakes to about 32 percent each from 36.3 percent.

LPL said it may realize net proceeds of $35.4 million if the deal is over-subscribed and underwriter purchase their “greenshoe” shares. These proceeds would help reduce term loans under senior secured credit facilities.

The shares are expected to begin trading on the Nasdaq on Thursday under the symbol “LPLA.”

The offering came amid the frenzy surrounding the record $22.7 billion General Motors Co [GM.UL] IPO on Wednesday, and a day after Carlyle Group’s Booz Allen Hamilton (BAH.N: Quote, Profile, Research, Stock Buzz) raised $238 million, at the low end of its expected range.

Booz shares surged 13 percent in its New York Stock Exchange debut on Wednesday, suggesting the market is again embracing private equity-backed issues.

Underwriters led by Goldman Sachs, Morgan Stanley, Bank of America Merrill Lynch and JPMorgan Chase & Co have an option to purchase an additional 1.6 million LPL shares to meet excess demand. Of those shares, 100,000 would be sold by the company.

A wave of brokers fleeing big Wall Street banks after the financial crisis helped fuel growth in LPL’s adviser ranks and its earnings for the past five years. Yet growth slowed in recent months, as worries about economic weakness and the May flash crash weighed on the markets.

The flow of advisers seeking independence also slowed, reflected in weaker recruiting results.

LPL in its IPO proxy revealed that Goldman, Morgan Stanley, Merrill and JPMorgan either hold equity interests in the firm or are lenders.

Certain affiliates of Goldman (GS.N: Quote, Profile, Research, Stock Buzz) will receive in aggregate more than 5 percent of the net proceeds of the offering, according to the LPL proxy.

(Reporting by Joseph A. Giannone, additional reporting by Jonathan Spicer; Editing by Gary Hill)