Taylor Morrison Steps Up In IPO Parade

  • TPG, Oaktree bought home builder in 2011
  • Plans to issue $500M in debt after IPO
  • Coty, CDW await; Toys R Us withdraws

With the S&P 500 and the Dow Jones Industrial Average breaking through to all-time highs and signaling a demand for equities this year, a roster of IPOs from private equity firms awaits investors.

Taylor Morrison plans to offer 23.8 million shares of common stock under the symbol TMHC at an estimated price of $20 to $22 a share. At the midpoint of the range, the IPO would raise $500 million. The stock debut is expected during the week of April 7, said Sal Morreale of Cantor Fitzgerald.

Following the IPO, Taylor Morrison plans to raise up to $500 million in debt capital, subject to market and other conditions. TPG and Oaktree bought the Scottsdale, Ariz.-based company for $1.2 billion from Taylor Wimpey in 2011.

Tapping into the recovery in the housing market, Taylor Morrison estimated its U.S. net sales orders for the two months ended Feb. 28 rose 71 percent to 888 homes from 519 homes in the same period in 2012.

The company continues to employ several private equity executives as board members, including Rajath Shourie, John Brady and Jason Keller of Oaktree; Kelvin Davis and Greg Kranias of TPG.

The deal comes just a few days after The Blackstone Group LP sold 29 million shares of Pinnacle Foods Inc. in an IPO that raised $580 million. The stock priced at $20 a share on March 28 and has traded above $22 since then, as of press time.

To encourage institutional investors, sponsors have been less likely to offer big chunks of stock in IPOs in order to show they continue to hold value in the firm after it goes public, said John Fitzgibbon of IPOScoop. Subsequent stock offerings often allow exits for private equity firms over time, he said.

Other IPOs in registration include a $700 million deal from Coty Inc. with ownership by JAB Holdings, Berkshire Partners LLC and Rhone Group LLC; a $750 million deal from Intelsat Global Holdings SA via Silver Lake; and a $500 million IPO from CDW Corp., with stakeholders Madison Dearborn and Providence Equity.

However, not all deals are making it out the door. Toys R Us, the Wayne, N.J., retailer held by entities controlled by Bain Capital, KKR & Co. and Vornado Realty Trust, withdrew its $800 million IPO on March 29. The company reported fiscal 2013 adjusted EBITDA of $1.02 billion, down from $1.05 billion in 2012. After filing the IPO in 2010, the company hadn’t amended its prospectus since June 30, 2011.