Target: Intelsat Global Holdings
Price: Up to $1.75 billion
Sponsor: Silver Lake
Underwriters: Goldman Sachs, JPMorgan, Morgan Stanley
Intelsat Global Holdings, an operator of satellite services, has filed to raise up to $1.75 billion in an initial public offering, sister news service Reuters reported. Intelsat, which transmitted television images of Neil Armstrong’s landing on the moon, was bought by Serafina Acquisition in 2008. Serafina is backed by private equity firm Silver Lake, among other funds.
Technology stocks have had a good run in an otherwise lackluster IPO market, and companies such as Audience Inc and Millennial Media Inc have benefited from the market’s soft spot on their debut. Payday lender Community Choice Financial Inc and energy company New Source Energy Corp. pulled their prospective offerings over the past fortnight as market conditions remained unpromising.
Luxembourg-based Intelsat told the U.S. Securities and Exchange Commission in a preliminary prospectus that Goldman Sachs, JPMorgan and Morgan Stanley were underwriting the IPO. Intelsat posted net loss of $400 million on revenue of $2.6 billion for the year ended Dec. 31, according to the regulatory filing. The company, which had operated as an intergovernmental organization for more than 30 years, became a private company in 2001.
Intelsat, which assumed debt of about $3.7 billion after the leveraged buyout (LBO), said it may use part of the proceeds from the offering to redeem and repay debt. The company’s revenue has been relatively flat and the offering seems to be a way to pay back debt, said Francis Gaskins, a partner at IPOdesktop.com.
In February, debt-laden casino operator Caesars Entertainment Corp. went public, to make up some of the losses made by its private equity owners. (Apollo Global Management and TPG Capital paid $31 billion to take Caesars, then known as Harrah’s Entertainment Inc., private in 2008.) LBOs, in which the acquisition is financed with a large amount of debt, have been criticized for saddling the companies with debt and leaving them with little options to pay them back. Gaskins said the Intelsat offering was not “particularly exciting.”
The filing did not reveal how many shares the company planned to sell or their expected price. The company, which will change its name to Intelsat SA before it goes public, intends to list its common stock on the New York Stock Exchange under the symbol “I”.
The amount of money a company says it plans to raise in its first IPO filings is used to calculate registration fees. The final size of the IPO could be different.
(Sharanya Hrishikesh is a trainee correspondent for Reuters in Bangalore, additional reporting by Sinead Carew.)