The end of summer is traditionally a slow period for IPOs, but that didn’t stop three portfolio companies of four private equity firms from testing the waters recently. The IPO market— buyout-backed or not — is so dry that the number filings in 2008 are down about 75% from the pace at the same time last year.
But two businesses backed by
Cincinnati-based The Walnut Group intends to raise about $172.5 million in its offering for The O’Gara Group, a counterterrorism products and training company. The company plans to use the proceeds from the offering to fund acquisitions, and has already agreed to buy five companies for a combined $232 million. The Walnut Group, which makes management-backed investments in privately held companies, purchased about 25% of The O’Gara Group in 2004.
KKR and Silver Lake chose a partial IPO as their exit plan for Avago Technologies, a fiber-optic and laser company that the firms purchased for $2.6 billion in late 2005. The chipmaker plans to raise $400 million in its offering on Nasdaq to pay down debt and provide a partial exit for its LBO backers. KKR and Silver Lake previously joined forces on semiconductor deals, including the $10.2 billion spinoff of Royal Philips Electronics’ semiconductor unit, announced in late 2005.
Madison Dearborn Partners plans to cash in on its remaining stake in a company it took public through a special purpose acquisition corporation (SPAC) in 2006. The Chicago-based firm filed to sell its final 24.5% stake in portfolio company Great Lakes Dredge & Dock. After owning the company for three years, Madison Dearborn took it public with Aldabra Acquisition, a SPAC raised by private equity pros at Terrapin Partners.
The deal, valued at $160 million, provided partial liquidity on Madison Dearborn’s $362 million investment, $97 million of which was equity. In August of 2007, the firm cashed out again, reducing its stake in the marine construction and dredging services company to its current 24.5% level. With the stock trading at about $7.60 a share, Madison Dearborn’s final cash-out is worth about $107 million.
Overall, it has been a down year for buyout-backed public offerings. Since going public in June, shares in