|
Archived IPO reports: INWK, AYR, EVR, GNC, MTRO, QI, ACCI, BGHI, OSIR, SCA |
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|
========================================================================= |
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|
SEARCH BY COMPANY |
Use 'Edit, find on this page' to search for companies |
|||||
|
for analysis |
scheduled below |
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|
========================================================================= |
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|
VALUATION RATIOS |
IPO Mrkt |
Price / |
Price / |
Price / |
Price / |
% offered |
|
Cap (mm) |
Sales |
Earnings |
BookValue |
TangibleBV |
in IPO |
|
|
Scheduled for August 14th week |
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|
InnerWorkings (INWK) |
$374 |
2.8 |
72 |
5.0 |
5.5 |
24% |
|
print procurement solutions (B-, 7) |
Post-IPO shrs:44mm |
|||||
|
Scheduled for August 7th week |
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|
Aircastle Limited (AYR) |
$1,100 |
6.5 |
25 |
1.8 |
1.8 |
18% |
|
lessor of commercial jet aircraft (C+, 6) |
Post-IPO shrs:50mm |
|||||
|
Evercore Partners (EVR) |
$515 |
3.7 |
99 |
5.8 |
11.0 |
15% |
|
investment banking boutique (C+, 7) |
Post-IPO shrs:27mm |
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|
GNC Corporation (GNC) |
$1,020 |
0.7 |
19 |
3.6 |
-242.9 |
39% |
|
nutritional retailer, 5,800 store nutritional retailer (C+, 7) |
Post-IPO shrs:60mm |
|||||
|
InterMetro Comm MTRO |
$88 |
4.2 |
-8 |
4.9 |
5.5 |
22% |
|
voice-over Internet Protocol (VoIP), C, 5 |
Post-IPO shrs:10mm |
|||||
|
Qimonda AG (QI) |
$5,814 |
1297.8 |
-291 |
1.5 |
1.4 |
18% |
|
semiconductor memory spinoff from Infineon (C, 6) |
Post-IPO shrs:342mm |
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|
Scheduled for July 31 week |
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|
Asset Capital (ACCI) |
$188 |
8.5 |
-28 |
1.2 |
1.3 |
47% |
|
real estate developer ( C, 4) |
Post-IPO shrs:20mm |
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|
Buckeye GP L.P. (BGH) |
$566 |
not an operating co |
2.3 |
29.0 |
50% |
|
|
General Prnter of Buckeye (NYSE:BKL) (C+, 6) |
Post-IPO shrs: 28mm |
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|
Osiris Thera(OSIR) |
$324 |
72.3 |
-16 |
6.9 |
6.7 |
13% |
|
stem cell treatments ( C, 7) |
Post-IPO shrs:27mm |
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|
Security Capital (SCA) |
$1,410 |
4.0 |
12 |
1.1 |
1.1 |
35% |
|
insurance: credit enhancement/protection (B-, 7) |
Post-IPO shrs: 64mm |
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|
========================================================================= |
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|
SEARCH BY COMPANY |
Use 'Edit, find on this page' to search for companies |
|||||
|
for analysis |
scheduled below |
|||||
|
========================================================================= |
||||||
|
Summary ratios for the week of Aug 7 |
||||||
|
(P/E ratios based on annualizing the June six months, unless otherwise noted) |
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|
VALUATION RATIOS |
IPO Mrkt |
Price / |
Price / |
Price / |
Price / |
% offered |
|
Cap (mm) |
Sales |
Earnings |
BookValue |
TangibleBV |
in IPO |
|
|
InnerWorkings (INWK) |
$374 |
2.8 |
72 |
5.0 |
5.5 |
24% |
|
print procurement solutions (B-, 7) |
Post-IPO shrs:44mm |
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|
========================================================================= |
||||||
|
SEARCH BY COMPANY |
Use 'Edit, find on this page' to search for companies |
|||||
|
for analysis |
scheduled below |
|||||
|
========================================================================= |
||||||
|
Summary ratios for the week of Aug 14 |
||||||
|
(P/E ratios based on annualizing the June six months, unless otherwise noted) |
||||||
|
InnerWorkings (INWK) |
INWK, B-, 7 |
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|
print procurement solutions |
Post-IPO shrs:44mm |
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|
Chicago, IL |
2005 |
6mosJun30 |
IPO Mkt |
|||
|
Revenue ($mm) |
proforma |
$100.0 |
$68.0 |
Cap (mm) |
||
|
Gross Profit % |
18.6% |
19.1% |
$374 |
|||
|
Income ($mm) |
$3.0 |
$2.6 |
@$8.5 |
|||
|
Net income % |
3.0% |
3.8% |
||||
|
Enterprise clients, end of period (see below) |
71 |
81 |
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|
Transaction clients |
709 |
484 |
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|
Total clients |
780 |
565 |
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|
Print jobs |
13,558 |
8,075 |
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|
VALUATION RATIOS |
Price / |
Price / |
Price / |
% offered |
||
|
Cap (mm) |
Sales |
Earnings |
BookValue |
TangibleBV |
in IPO |
|
|
InnerWorkings (INWK) |
$374 |
2.8 |
72 |
5.0 |
5.5 |
24% |
|
SCORECARD |
Mgt |
Market |
Market Do- |
Proprie- |
Total |
|
|
1-5, 5 is high |
Growth |
mination |
tary |
rating |
||
|
20 is perfect |
3 |
1 |
2 |
1 |
7 |
|
|
Business |
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|
. Provider of print procurement solutions to corporate clients in the United States. |
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|
. Utilizes a proprietary technology and database, as well as extensive domain expertise, to create a |
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|
competitive bid process to procure, purchase and deliver printed products as part of a |
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|
comprehensive outsourced enterprise solution and in individual transactions. |
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|
Expects decreasing growth rate |
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|
. As INWK’s revenue has grown since inception, growth rates have decreased. |
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|
. INWK expects that its revenue will continue to increase and that its growth rates will continue to |
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|
decrease. |
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|
Experienced management team |
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|
. The non-executive Chairman, John Walter, is the former Chairman and Chief Executive Officer |
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|
of R.R. Donnelley. |
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|
, CEO Steven Zuccarini, is the former president of the Catalog & Retail and the Global Solutions |
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|
business units of North America’s largest print company, R.R. Donnelley & Sons Company, |
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|
where he was responsible for providing enterprise solutions to its largest clients |
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|
Seasonal patterns |
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|
. The print industry has historically been subject to seasonal sales fluctuations because a |
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|
substantial number of print orders are placed for the year-end holiday season. |
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|
. INWK historically experienced seasonal client buying patterns with a higher percentage of |
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|
revenue being earned in third and fourth quarters. |
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|
. Revenue from the wholly-owned subsidiary, Insight World Group, LLC, is particularly subject to |
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|
these seasonal fluctuations because its primary products include toys, games and other items that |
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|
clients generally order in increased quantities in anticipation of the year-end holiday season. |
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|
Industry |
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|
. INWK business of providing print procurement solutions intersects two large and growing |
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|
industries, commercial printing and business process outsourcing, or BPO. |
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|
. Total shipments in the worldwide commercial print industry were projected to be approximately |
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|
$367 billion in 2005 and are expected to increase by an average of $8 billion per year through |
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|
2009, according to a 2005 Datamonitor global commercial printing industry profile. |
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|
. To become more competitive, many businesses seek to focus on core competencies and |
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|
outsource non-core business functions, such as print procurement. |
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|
. According to a 2005 IDC global BPO forecast, the worldwide market for BPO is estimated to |
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|
grow from $422 billion in 2005 to $641 billion in 2009, representing a compound annual growth |
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|
rate of 11%. |
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|
Excess print industry capacity |
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|
. In recent years, the print industry has been impacted by developments in technology, including |
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|
enhanced output capacity of printing presses and increased utilization of Internet-based |
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|
communications and digital printing. |
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|
. These developments have lowered barriers to entry, increased the number of print suppliers |
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|
available to clients and reduced the utilization of printing presses. |
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|
. As a result, the print industry has experienced, and is continuing to experience, significant excess |
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|
manufacturing capacity and the market for printed products has become increasingly |
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|
commoditized. |
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|
Fragmented |
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|
. In addition, the U.S. print industry is highly fragmented, with an estimated 39,300 printing |
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|
plants. |
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|
. In 2005, the ten largest commercial print companies accounted for only approximately 16% of |
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|
the total domestic print market. |
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|
. The traditional process of designing, procuring and producing a print order requires extensive |
||||||
|
collaboration by printers, designers, brokers and other middlemen and is often highly inefficient |
||||||
|
for the customer, who typically pays a mark-up at each intermediate stage of the supply chain. |
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|
Enterprise (recurring) clients versus transactional clients |
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|
. Contracts with enterprise clients generally have an open-ended term subject to termination by |
||||||
|
either party upon prior notice of 90 to 180 days. Several of INWK’s larger enterprise clients have |
||||||
|
outsourced substantially all of their recurring print needs to INWK. |
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|
. INWK provides printed products to transactional clients on an order-by-order basis. |
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|
. As of December 31, 2005, had 69 enterprise clients and, from inception through December |
||||||
|
31, 2005, served over 1,100 transactional clients. |
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|
. During 2005, enterprise clients accounted for 69% of revenue, while transactional clients |
||||||
|
accounted for 31% of revenue. |
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|
Growth from enterprise clients |
||||||
|
. During 2005, INWK entered into contracts with 23 enterprise clients, including 17 new clients |
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|
and six clients that INWK initially serviced on a transactional basis. |
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|
. 25 of 81 enterprise clients as of June 30, 2006 began as transactional accounts. |
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|
Gross & net profits |
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|
. Revenue from enterprise clients tends to generate lower gross profit margins than revenue from |
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|
transactional clients because the gross profit margins established in INWK contracts with large |
||||||
|
enterprise clients are generally lower than the gross profit margins typically realized in the |
||||||
|
transactional business. |
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|
. Although enterprise revenue generates lower gross profit margins, INWK enterprise business |
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|
tends to be more profitable than its transactional business on an operating profit basis because the |
||||||
|
commission expense associated with enterprise jobs is generally lower. |
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|
INWK’s sofware & database |
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|
. INWK’s proprietary software applications and database, PPM4™, create a fully-integrated |
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|
solution that stores, analyzes and tracks the production capabilities of INWK’s supplier network, |
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|
as well as quote and price data for each bid receives and print jobs INWK executes. |
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|
. As a result, INWK believes PPM4™ contains one of the largest independent repositories of |
||||||
|
equipment profiles and price data for print suppliers in the United States. |
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|
. INWK leverages its technology to match each print job with the supplier that is optimally suited |
||||||
|
to meet the client’s needs at a competitive price. INWK procurement managers use PPM4™ to |
||||||
|
manage the print procurement process from end-to-end. |
||||||
|
2,700 supplier network |
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|
Through INWK’s network of over 2,700 suppliers, INWK offers a full range of print, fulfillment |
||||||
|
and logistics services that allows INWK to procure printed products on virtually any substrate. |
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|
Growth plan |
||||||
|
. INWK believes the opportunity exists to expand its business into new geographic markets. |
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|
. Headquarters are located in Chicago, and approximately 66% of INWK’s clients as of December |
||||||
|
31, 2005 were located in Illinois. |
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|
. INWK’s objective is to increase sales in other major print markets in the United States, such as |
||||||
|
Boston, Los Angeles, Minneapolis, New York and San Francisco. |
||||||
|
. INWK intends to hire or acquire more account executives within close proximity to these large |
||||||
|
markets, which accounted for, in aggregate, $18.4 billion of print expenditures in 2005, according |
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|
to PIA/GATF. |
||||||
|
. In addition, given that the print industry is a global business, over time INWK intends to evaluate |
||||||
|
opportunities to access attractive markets outside the United States. |
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|
. For example, in March 2006 we entered into a strategic agreement to grant SNP Corporation Ltd. |
||||||
|
a non-exclusive, non-transferable license to use certain non-core applications of its software in |
||||||
|
China, Singapore and Hong Kong. |
||||||
|
Recent acquisition |
||||||
|
. INWK acquired Graphography Limited LLC on May 31, 2006. Graphography is a provider of |
||||||
|
production management services, including print procurement and promotional services |
||||||
|
. In 2005, Graphography generated revenue of $23.8 million, representing 23.6% of 2005 pro |
||||||
|
forma revenue. |
||||||
|
. Results of operations during the six months ended June 30, 2006 include Graphography’s results |
||||||
|
of operations in June 2006. |
||||||
|
Acquisition price |
||||||
|
. The acquisition consideration for Graphography consisted of $4.525 million in cash paid on May |
||||||
|
31, 2006. In addition, the former owners of Graphography will receive: |
||||||
|
• $1 million if revenue generated from certain accounts exceeds $5 million by the second |
||||||
|
anniversary of the closing date, |
||||||
|
• $2 million if revenue generated from these accounts exceeds $7.5 million by the third |
||||||
|
anniversary of the closing date, minus any amount paid on the second anniversary of the closing date, and |
||||||
|
• $3 million if revenue generated from these accounts exceeds $12 million by the fourth |
||||||
|
anniversary of the closing date, minus any amounts paid on the second and third anniversaries of |
||||||
|
the closing date. |
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|
Recent Developments |
||||||
|
$200 market cap in January, 2006 transaction |
||||||
|
. In January 2006, INWK issued 10mm shares, or approximately 25% of equity interests on a |
||||||
|
fully-diluted basis, to New Enterprise Associates 11, Limited Partnership, NEA Ventures 2005, |
||||||
|
Limited Partnership and Printworks Series E, LLC in exchange for $50 million in cash, or $4.92 |
||||||
|
per share |
||||||
|
. INWK retained $10 million of these proceeds for working capital and general corporate |
||||||
|
purposes, which means shareholders sold $40mm worth of stock |
||||||
|
. $200mm market cap at that time. |
||||||
|
SNP Transaction |
||||||
|
. In March 2006, INWK entered into a strategic agreement pursuant to which it granted SNP |
||||||
|
Corporation Ltd., a leading, Singapore-Exchange listed printing group in the Asia Pacific region |
||||||
|
(SNP), a non-exclusive, non-transferable license to use certain non-core applications of INWK’s |
||||||
|
software in China, Singapore and Hong Kong. |
||||||
|
. Pursuant to the terms of the agreement, SNP is paying INWK $1.0 million in five monthly |
||||||
|
installments of $200,000, which began in April 2006. |
||||||
|
. The initial term of the agreement is one year and is automatically renewed for successive one |
||||||
|
year terms in the absence of a termination by either party. In the event the agreement is renewed |
||||||
|
. SNP will pay INWK 1% of the gross revenue for all transactions processed through the licensed |
||||||
|
software during the term of the agreement. |
||||||
|
. In connection with the agreement, INWK sold 254,065 shares of common stock to SNP at a |
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|
price of $4.92 per share for a total purchase price of $1.25 million. |
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|
Competition |
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|
Print-related industries, including paper and pulp, graphics art and pre-press and fulfillment and |
||||||
|
logistics. |
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|
Printers |
||||||
|
. Primary competitors are printers that employ traditional methods of marketing and selling their |
||||||
|
printed materials. |
||||||
|
. Many of these printers, such as Banta, Quad/Graphics, Quebecor and R.R. Donnelley have larger |
||||||
|
client bases and significantly more resources than we INWK. |
||||||
|
. Print buyers may prefer to utilize the traditional services offered by the printers with whom |
||||||
|
INWK competes. |
||||||
|
. Alternatively, some of these printers may elect to offer outsourced print procurement services or |
||||||
|
enterprise software applications, and their well-established client relationships, industry |
||||||
|
knowledge, brand recognition, financial and marketing capabilities, technical resources and |
||||||
|
pricing flexibility may provide them with a competitive advantage over INWK |
||||||
|
Print distributors and brokers |
||||||
|
. These competitors generally do not own or operate printing equipment, and typically work with a |
||||||
|
limited number of suppliers and have minimal financial investment in the quality of the products |
||||||
|
produced for their clients. |
||||||
|
. INWK’s industry experience indicates that several of these competitors, such as Cirqit, |
||||||
|
Workflow/Relizon and Newline/Noosh, offer print procurement services or enterprise software |
||||||
|
applications for the print industry. |
||||||
|
Use of $54mm in IPO proceeds from sale of 7mm shares |
||||||
|
(shareholders intend to offer 3.5mm shares) |
||||||
|
To expand sales force, acquire or make strategic investments in complementary businesses and for |
||||||
|
working capital and other general corporate purposes |
||||||
|
Recapitalization |
||||||
|
Prior to the completion of this offering, INWK intends to recapitalize all outstanding shares of |
||||||
|
common and preferred stock into shares of common stock on a one-for-one basis. |
||||||
|
. In connection with the recapitalization and the closing of this offering, intends to make |
||||||
|
$7.0 million of required preference and accrued dividend payments to the holders of Series B, |
||||||
|
D and E preferred shares (which doesn’t include shares purchased in the IPO). |
||||||
|
========================================================================= |
||||||
|
SEARCH BY COMPANY |
Use 'Edit, find on this page' to search for companies |
|||||
|
for analysis |
scheduled below |
|||||
|
========================================================================= |
||||||
|
Summary ratios for the week of Aug 7 |
||||||
|
(P/E ratios based on annualizing the March quarter, unless otherwise noted) |
||||||
|
VALUATION RATIOS |
IPO Mrkt |
Price / |
Price / |
Price / |
Price / |
% offered |
|
Cap (mm) |
Sales |
Earnings |
BookValue |
TangibleBV |
in IPO |
|
|
Aircastle Limited (AYR) |
$1,100 |
6.5 |
25 |
1.8 |
1.8 |
18% |
|
lessor of commercial jet aircraft (C+, 6) |
Post-IPO shrs:50mm |
|||||
|
Evercore Partners (EVR) |
$515 |
3.7 |
99 |
5.8 |
11.0 |
15% |
|
investment banking boutique (C+, 7) |
Post-IPO shrs:27mm |
|||||
|
GNC Corporation (GNC) |
$1,020 |
0.7 |
19 |
3.6 |
-242.9 |
39% |
|
nutritional retailer, 5,800 store nutritional retailer (C+, 7) |
Post-IPO shrs:60mm |
|||||
|
InterMetro Comm MTRO |
$88 |
4.2 |
-8 |
4.9 |
5.5 |
22% |
|
voice-over Internet Protocol (VoIP), C, 5 |
Post-IPO shrs:10mm |
|||||
|
Qimonda AG (QI) |
$5,814 |
1297.8 |
-291 |
1.5 |
1.4 |
18% |
|
semiconductor memory spinoff from Infineon (C, 6) |
Post-IPO shrs:342mm |
|||||
|
========================================================================= |
||||||
|
SEARCH BY COMPANY |
Use 'Edit, find on this page' to search for companies |
|||||
|
for analysis |
scheduled below |
|||||
|
========================================================================= |
||||||
|
Summary ratios for the week of Aug 7 |
||||||
|
(P/E ratios based on annualizing the March quarter, unless otherwise noted) |
||||||
|
Aircastle Limited |
AYR, C+, 6 |
|||||
|
lessor of commercial jet aircraft |
Post-IPO shrs:50mm |
|||||
|
Stamford, Connecticut |
2005 |
3mos Mar |
3mos June |
IPO Mkt |
||
|
Rev ($mm) |
$36.0 |
$33.0 |
$42.1 |
Cap (mm) |
||
|
Pre-tax income ($mm) |
0.2 |
11.2 |
5.0 |
$1,100 |
||
|
EBITDA ($mm) |
$23.0 |
$26.3 |
$30.0 |
@$22 |
||
|
Pre-tax income % |
0.6% |
33.9% |
11.9% |
|||
|
Note: June three month numbers includes $6.1 in write-offs, not include in P/E ratio |
||||||
|
VALUATION RATIOS |
IPO Mrkt |
Price / |
Price / |
Price / |
Price / |
% offered |
|
Cap (mm) |
Sales |
Earnings |
BookValue |
TangibleBV |
in IPO |
|
|
Aircastle Limited (AYR) |
$1,100 |
6.5 |
25 |
1.8 |
1.8 |
18% |
|
SCORECARD |
Mgt |
Market |
Market Do- |
Proprie- |
Total |
|
|
1-5, 5 is high |
Growth |
mination |
tary |
rating |
||
|
20 is perfect |
2 |
2 |
1 |
1 |
6 |
|
|
Business |
||||||
|
.Global company that acquires and leases high-utility commercial jet aircraft to passenger and |
||||||
|
cargo airlines throughout the world. |
||||||
|
. High-utility aircraft are generally modern, operationally efficient jets with a large operator base |
||||||
|
and long useful lives. |
||||||
|
. As of March 31, 2006, AYR's aircraft portfolio consisted of 42 aircraft that were leased to 24 |
||||||
|
lessees located in 16 countries and managed through offices in the United States, Ireland and |
||||||
|
Singapore. |
||||||
|
Net operating leases |
||||||
|
. All of AYR's aircraft are subject to net operating leases whereby the lessee is generally |
||||||
|
responsible for maintaining the aircraft and paying operational and insurance costs although, in a |
||||||
|
majority of cases, AYR is obligated to pay a portion of specified maintenance or modification |
||||||
|
costs. |
||||||
|
Other aviation assets |
||||||
|
. AYR also makes investments in other aviation assets, including debt securities secured by |
||||||
|
commercial jet aircraft. |
||||||
|
. As of July 18, 2006, had acquired and committed to acquire aviation assets having an aggregate |
||||||
|
purchase price equal to $1.3 billion and $305.3 million, respectively, for a total of $1.6 billion. |
||||||
|
. In addition, as of July 18, 2006, had entered into non-binding letters of intent to acquire an |
||||||
|
additional 8 aircraft subject to lease. These letters of intent will not become binding commitments |
||||||
|
for us or the seller until internal approvals, due diligence and certain other steps are completed. |
||||||
|
We expect to benefit from the size and growth of the commercial aircraft market and to increase |
||||||
|
our revenues and earnings by acquiring additional aviation assets. |
||||||
|
Worldwide market |
||||||
|
. Of comercial aircraft fleet consists of more than 17,000 aircraft with an aggregate estimated |
||||||
|
value in excess of $330 billion and is expected to grow at a compound annual growth rate of 6.1% |
||||||
|
through 2015. |
||||||
|
. The market is highly fragmented, with over 1,800 owners. |
||||||
|
. Operating lessors, including AYR, owns 30.1% of the global fleet. |
||||||
|
. The continued growth in air traffic, driven in large part by emerging markets with strong |
||||||
|
economic growth and rising levels of per capita air travel, has increased the demand, and lease |
||||||
|
rates, for certain high-utility aircraft types. |
||||||
|
Fortress, 98% owner pre-IPO |
||||||
|
Fortress is a leading global alternative investment management firm founded in 1998 with over |
||||||
|
$21 billion of equity capital currently under management. Fortress is headquartered in New York |
||||||
|
City and has affiliates with offices in Dallas, Frankfurt, Geneva, Hong Kong, London, Rome, San |
||||||
|
Diego, Sydney and Toronto. Fortress manages capital for a diverse group of investors, including |
||||||
|
pension funds, university endowments and foundations, financial institutions, funds-of-funds and |
||||||
|
Recent, pre-IPO dividends |
||||||
|
. On July 20, 2006, declared a $14.4 million dividend, for the three months ended June 30, 2006, |
||||||
|
payable on July 31, 2006. |
||||||
|
. In addition, declared a $7.2 million, to shareholders of record as of August 1, 2006 |
||||||
|
Future dividend policy |
||||||
|
. Intends to continue to pay regular quarterly dividends |
||||||
|
. Plans to grow dividends through the acquisition of additional aviation assets. |
||||||
|
Use of $183mm in IPO proceeds |
||||||
|
. Repay approximately $143.2 million of a $750 million senior secured revolving credit facility |
||||||
|
. General corporate purposes |
||||||
|
======================================================== |
||||||
|
Evercore Partners |
EVR, C+, 7 |
|||||
|
investment banking boutique |
Post-IPO shrs:27mm |
|||||
|
New York, NY |
2005 |
3mos Mar31 |
IPO Mkt |
|||
|
Advisory Rev ($mm) |
proforma |
$127.0 |
$35.0 |
Cap (mm) |
||
|
Inv mgt rev ($mm) |
$18.4 |
$8.8 |
$515 |
|||
|
Total Rev ($mm) |
$146.0 |
$44.0 |
@$19 |
|||
|
Income ($mm) |
$3.5 |
$1.3 |
||||
|
Net income % |
2.8% |
3.7% |
||||
|
VALUATION RATIOS |
Price / |
Price / |
Price / |
% offered |
||
|
Cap (mm) |
Sales |
Earnings |
BookValue |
TangibleBV |
in IPO |
|
|
Evercore Partners (EVR) |
$515 |
3.7 |
99 |
5.8 |
11.0 |
15% |
|
SCORECARD |
Mgt |
Market |
Market Do- |
Proprie- |
Total |
|
|
1-5, 5 is high |
Growth |
mination |
tary |
rating |
||
|
20 is perfect |
2 |
2 |
2 |
1 |
7 |
|
|
Business |
||||||
|
. Evercore Partners believes it is the leading investment banking boutique in the world, based on |
||||||
|
the dollar volume of announced worldwide merger and acquisition transactions on which EVY |
||||||
|
have advised since 2001. |
||||||
|
. When EVR uses the term "investment banking boutique", it means an investment banking firm |
||||||
|
that does not underwrite public offerings of securities or engage in commercial banking activities. |
||||||
|
. Provides advisory services to prominent multinational corporations on significant mergers, |
||||||
|
acquisitions, divestitures, restructurings and other strategic corporate transactions. |
||||||
|
. Evercore also includes a successful investment management business through which it manage |
||||||
|
private equity funds for sophisticated institutional investors. |
||||||
|
. Serves a diverse set of clients around the world from our offices in New York, Los Angeles and |
||||||
|
San Francisco. |
||||||
|
Founded in 1996, has grown from three Senior Managing Directors at our inception to 25 today. |
||||||
|
Two business segments |
||||||
|
Advisory business |
||||||
|
. In the advisory business, has thirteen Senior Managing Directors with expertise and client |
||||||
|
relationships in a number of industry sectors, including telecommunications, technology, media, |
||||||
|
energy, general industrial, consumer products and financial institutions. |
||||||
|
. In addition, has augmented the advisory business by adding professionals with extensive |
||||||
|
restructuring experience. |
||||||
|
Investment management business |
||||||
|
. In the investment management business, has eight Senior Managing Directors with expertise and |
||||||
|
client relationships in a variety of industries. |
||||||
|
. Has raised three private equity funds, with capital commitments as of March 31, 2006 of over |
||||||
|
$1.2 billion. |
||||||
|
Management |
||||||
|
. Senior leadership is comprised of Roger Altman, the former U.S. Deputy Treasury Secretary and |
||||||
|
Vice Chairman of The Blackstone Group; Austin Beutner, a former General Partner of The |
||||||
|
Blackstone Group; and Eduardo Mestre, the former head of Citigroup’s Global Investment Bank |
||||||
|
. On May 12, 2006, agreed to combine the business with that of Protego Asesores, a leading |
||||||
|
investment banking boutique in Mexico founded by Pedro Aspe. Following our combination with |
||||||
|
Protego, Mr. Aspe, the former Minister of Finance of Mexico, will join our management team. |
||||||
|
Pending Protego combination |
||||||
|
. With the pending Protego combination, will add another seven Senior Managing Directors. |
||||||
|
. Expects to continue growth by hiring additional highly qualified professionals with a broad range |
||||||
|
of product and industry expertise, expanding into new geographic areas, raising additional private |
||||||
|
equity funds and diversifying investment management services. |
||||||
|
Competition |
||||||
|
. Primary competitors in securing advisory engagements are Citigroup, Credit Suisse, Goldman, |
||||||
|
Sachs & Co., Lazard, Lehman Brothers, Merrill Lynch, Morgan Stanley, UBS Investment Bank |
||||||
|
and other large investment banking firms as well as investment banking boutiques such as Allen & |
||||||
|
Co., The Blackstone Group, Gleacher Partners, Greenhill & Co. and Rohatyn Associates. |
||||||
|
. Evercore Asset Management, which seeks to make investments for institutional and high net |
||||||
|
worth investors, faces substantial competition from a large number of traditional asset |
||||||
|
management companies |
||||||
|
Use of $63mm in IPO proceeds from sale of 4mm shares |
||||||
|
. $36 million to repay debt |
||||||
|
. Remaining $26.8 million to expand and diversify advisory and investment management |
||||||
|
businesses and for general corporate purposes. |
||||||
|
========================================================== |
||||||
|
GNC Corporation |
GNC, C+, 7 |
|||||
|
nutritional retailer, 5,800 store nutritional retailer |
Post-IPO shrs:60mm |
|||||
|
Pittsburgh, Pennsylvania |
2004 |
2005 |
3mos Mar |
3mos June |
IPO Mkt |
|
|
Rev ($mm) |
$1,345.0 |
$1,318.0 |
$387.0 |
$382.0 |
Cap (mm) |
|
|
Gross profit |
33.5% |
31.8% |
33.6% |
n/a |
$1,020 |
|
|
Income ($mm) |
$41.7 |
$18.4 |
$11.4 |
$13.1 |
@$17 |
|
|
Net income % |
3.1% |
1.4% |
2.9% |
3.4% |
||
|
EBITDA ($mm) |
$140.0 |
$113.0 |
$37.4 |
$40.0 |
||
|
VALUATION RATIOS |
IPO Mrkt |
Price / |
Price / |
Price / |
Price / |
% offered |
|
Cap (mm) |
Sales |
Earnings |
BookValue |
TangibleBV |
in IPO |
|
|
GNC Corporation (GNC) |
$1,020 |
0.7 |
19 |
3.6 |
-242.9 |
39% |
|
SCORECARD |
Mgt |
Market |
Market Do- |
Proprie- |
Total |
|
|
1-5, 5 is high |
Growth |
mination |
tary |
rating |
||
|
20 is perfect |
2 |
2 |
2 |
1 |
7 |
|
|
Business |
||||||
|
. Largest global specialty retailer of health and wellness products, including vitamins, minerals, |
||||||
|
herbal and specialty supplements, sports nutrition products, and diet products. |
||||||
|
. Based on a worldwide network of over 5,800 locations and the www.gnc.com website |
||||||
|
. As of June 30, 2006, operated 2,523 company-owned stores in the United States, 132 company |
||||||
|
owned stores in Canada, 1,098 domestic franchised stores, 899 international franchised stores in |
||||||
|
43 international markets, and 1,183 store-within-a-store locations. |
||||||
|
Revenue sources & products |
||||||
|
. GNC derives its revenues principally from product sales through company-owned stores, |
||||||
|
franchise activities, and sales of products manufactured in GNC facilities to third parties. |
||||||
|
. GNC believes it has a broad and deep product mix, focused on high-margin, value-added |
||||||
|
nutritional products, sold under our GNC proprietary brands, including Mega Men®, Ultra |
||||||
|
Mega®, Pro Performance®, and Preventive Nutrition®, and under nationally recognized third |
||||||
|
party brands. |
||||||
|
Leveraged buyout |
||||||
|
. Pre-IPO 98% owned by Apollo Management V (a private equity, leveraged buyout fund) |
||||||
|
. On December 5, 2003, GNC acquired 100% of the outstanding equity interests of General |
||||||
|
Nutrition Companies, Inc. from Numico for an aggregate purchase price of $747.4 million, |
||||||
|
consisting of $733.2 million in cash and the assumption of $14.2 million of mortgage debt. |
||||||
|
Competition |
||||||
|
. Other specialty retailers, supermarkets, drugstores, mass merchants, multi-level marketing |
||||||
|
organizations, mail-order companies, other internet sites, and a variety of other smaller |
||||||
|
participants. |
||||||
|
. In addition, GNC believes the market is highly sensitive to the introduction of new products, |
||||||
|
including various prescription drugs, which may rapidly capture a significant share of the market. |
||||||
|
. GNC’s wholesale and manufacturing operations also competes with other wholesalers and |
||||||
|
manufacturers of third-party nutritional supplements. |
||||||
|
Use of $148mm of IPO proceeds from sale of 9.4mm shares |
||||||
|
(shareholders intend to sell 14.1mm shares) |
||||||
|
Redeem all outstanding preferred stock |
||||||
|
========================================================= |
||||||
|
InterMetro Comm |
MTRO, C, 5 |
|||||
|
voice-over Internet Protocol,, VoIP |
Post-IPO shrs:10mm |
|||||
|
Simi Valley, California |
2005 |
3mos Mar31 |
IPO Mkt |
|||
|
Rev ($mm) |
$18.4 |
$5.3 |
Cap (mm) |
|||
|
Gross Profit |
26.6% |
13.3% |
$88 |
|||
|
Loss ($mm) |
($1.6) |
($2.9) |
@$9 |
|||
|
Loss % |
-8.7% |
-55.2% |
||||
|
VALUATION RATIOS |
IPO Mrkt |
Price / |
Price / |
Price / |
Price / |
% offered |
|
Cap (mm) |
Sales |
Earnings |
BookValue |
TangibleBV |
in IPO |
|
|
InterMetro Comm MTRO |
$88 |
4.2 |
-8 |
4.9 |
5.5 |
22% |
|
SCORECARD |
Mgt |
Market |
Market Do- |
Proprie- |
Total |
|
|
1-5, 5 is high |
Growth |
mination |
tary |
rating |
||
|
20 is perfect |
1 |
2 |
1 |
1 |
5 |
|
|
Goal |
||||||
|
. MTRO’s goal is to displace the incumbent long distance carriers as the presumed choice for |
||||||
|
voice transport services |
||||||
|
. By focusing on providing the national transport component of voice services over MTRO’s |
||||||
|
private VoIP infrastructure |
||||||
|
Business |
||||||
|
. InterMetro has built a national, private, proprietary voice-over Internet Protocol, or VoIP, |
||||||
|
network infrastructure offering an alternative to traditional long distance network providers. |
||||||
|
. MTRO uses its network infrastructure to deliver voice calling services to traditional long distance |
||||||
|
carriers, broadband phone companies, VoIP service providers, wireless providers, other |
||||||
|
communications companies and end users. |
||||||
|
. MTRO’s believes VoIP technology is generally more cost efficient than the circuit-based |
||||||
|
technologies predominantly used in existing long distance networks and is also easier to integrate |
||||||
|
with enhanced IP communications services such as web-enabled phone call dialing, unified |
||||||
|
messaging and video conferencing services. |
||||||
|
Recent developments |
||||||
|
Cantata Technology Agreement. |
||||||
|
.In May 2006, entered into a strategic agreement with Cantata Technology, Inc., or Cantata, |
||||||
|
formerly known as Excel Switching Corporation, a leading provider of VoIP equipment and |
||||||
|
support services. |
||||||
|
. Plans to significantly expand our VoIP network using Cantata’s latest, state of the art VoIP |
||||||
|
equipment |
||||||
|
Acquisition of Advanced Tel, Inc. In March 2006 |
||||||
|
Switchless reseller of wholesale long-distance services |
||||||
|
SS-7 Network Build-out. |
||||||
|
. In the fall of 2005, began to develop and implement technology to connect network directly to |
||||||
|
local telephone companies and wireless networks in the major metropolitan markets that MTRO |
||||||
|
serves through the addition of SS-7 capabilities to MTRO’s VoIP infrastructure. |
||||||
|
. SS-7 technology allows access to customers of the local telephone companies as well as |
||||||
|
customers of wireless carriers. |
||||||
|
. Prior to the SS-7implementation, MTRO primarily connected to competitive local exchange |
||||||
|
carriers, or CLECs, in each metropolitan market which in turn connected to the local telephone |
||||||
|
company in that market. |
||||||
|
. In March 2006, we began utilizing the SS-7 connections to provide services. |
||||||
|
Competition |
||||||
|
Carrier Services |
||||||
|
. When selling to carrier customers, primarily competes with other carriers, including MCI, Qwest |
||||||
|
and Global Crossing. |
||||||
|
. Also compete with a number of smaller IP-based providers that focus either on a specific product |
||||||
|
or set of products or within a geographic region |
||||||
|
Retail Services |
||||||
|
. Compete for retail distribution partners against long distance providers including AT&T, MCI, |
||||||
|
Sprint and IDT who provide calling cards and prepaid services |
||||||
|
Note: Vonage is mentioned as having been involved with FCC filings, but is notably absent form |
||||||
|
MTRO’s list of competitors |
||||||
|
Use of $17mm in IPO proceeds |
||||||
|
• expansion of sales and |
||||||
|
• investments in network infrastructure |
||||||
|
• further development of service offerings |
||||||
|
========================================================== |
||||||
|
Qimonda AG |
QI, C, 6 |
|||||
|
semiconductor memory spinoff from Infineon |
Post-IPO shrs:342mm |
|||||
|
Munich, Germany |
2005 |
6mos Mar31 |
IPO Mkt |
|||
|
Rev ($mm) |
$3,406.0 |
$1,950.0 |
Cap (mm) |
|||
|
Gross Profit |
23.4% |
13.1% |
$5,814 |
|||
|
Operating income |
1.8% |
-8.3% |
@$17 |
|||
|
Income (loss) ($mm) |
$22.0 |
($165.0) |
||||
|
Income (loss) (%) |
0.6% |
-8.5% |
||||
|
Cash from operatating activities |
$583.0 |
($6.0) |
||||
|
VALUATION RATIOS |
IPO Mrkt |
Price / |
Price / |
Price / |
Price / |
% offered |
|
Cap (mm) |
Sales |
Earnings |
BookValue |
TangibleBV |
in IPO |
|
|
Qimonda AG (QI) |
$5,814 |
1297.8 |
-291 |
1.5 |
1.4 |
18% |
|
SCORECARD |
Mgt |
Market |
Market Do- |
Proprie- |
Total |
|
|
1-5, 5 is high |
Growth |
mination |
tary |
rating |
||
|
20 is perfect |
1 |
1 |
3 |
1 |
6 |
|
|
Note: market growth is scored 1 because the DRAM forecast for 2006 is -4.5% relative to 2005 |
||||||
|
Proprietary is scored 1 because the gross profit is very low |
||||||
|
American Depositary Shares |
||||||
|
Business |
||||||
|
. One of the world’s leading suppliers of semiconductor memory products, especially DRAMs |
||||||
|
(dynamic random access memory) |
||||||
|
. Designs semiconductor memory technologies and develops, manufactures, markets and sells a |
||||||
|
large variety of semiconductor memory products on a chip, component and module level. |
||||||
|
Spin-off/Carve-out |
||||||
|
. Began operations within the Semiconductor Group of Siemens AG, whose roots in |
||||||
|
semiconductor R&D and manufacturing date back to 1952 |
||||||
|
. Operated as the Memory Products segment of Infineon Technologies AG since its carve-out from |
||||||
|
Siemens AG in 1999. |
||||||
|
. In each of the past five years, captured between 9% and 15% of the worldwide DRAM market |
||||||
|
based on revenues, according to industry research firm Gartner. |
||||||
|
. Although market share fluctuates, and QI may lose market share quarter-to-quarter or year-to |
||||||
|
year as it did in the fourth quarter of the 2005 calendar year and in 2005 overall, in each of those |
||||||
|
five years, QI remained among the four largest DRAM suppliers worldwide based on revenues. |
||||||
|
March 31, 2006 quarter |
||||||
|
. For the first time in the quarter ended March 31, 2006, QI was the world’s second largest |
||||||
|
supplier of DRAM by revenue, with a market share of approximately 17%, according to Gartner. |
||||||
|
Principal products |
||||||
|
. DRAM components and modules for use in a wide range of electronic products. |
||||||
|
. QI’sDRAM products include standard DRAMs for use in personal computers, notebooks and |
||||||
|
workstations as well as a growing range of technologically more advanced DRAMs for use in |
||||||
|
infrastructure, graphics, mobile and consumer applications. |
||||||
|
Principal customers |
||||||
|
. Include major computing original equipment manufacturers, or OEMs, most prominently HP, |
||||||
|
Dell, IBM, Sun Microsystems and Sony. |
||||||
|
. To expand customer coverage and breadth, QI also sells a wide range of products to memory |
||||||
|
module manufacturers that have diversified customer bases, such as Kingston, and to a number of |
||||||
|
distributors. |
||||||
|
. More recently and in connection with the ongoing expansion of QI’s product portfolio, especially |
||||||
|
into graphics applications, added customers with a strong focus on enabling these applications, |
||||||
|
such as nVidia and ATI. |
||||||
|
Competition |
||||||
|
. Samsung Electronics, Standard, infrastructure, graphics, mobile and consumer DRAMs, 28% |
||||||
|
. Hynix Semiconductor, Standard, infrastructure, graphics, mobile and consumer DRAMs, 15% |
||||||
|
. Micron Technology, Standard, infrastructure, mobile and consumer DRAMs, 14% |
||||||
|
. Elpida Memory, Infrastructure, mobile and consumer DRAMs, 9% |
||||||
|
. Nanya Technology Corporation, Standard DRAMs, 6% |
||||||
|
According to market research firm Gartner Group, QI had the second largest market share based |
||||||
|
on DRAM revenue in the first quarter of calendar year 2006, with a 17% share. |
||||||
|
Use of $684mm from sale of 41mm shares |
||||||
|
(Infineon intends to sell 21mm shares) |
||||||
|
. Between $375 million and $438 million to expand manufacturing capacity and improve |
||||||
|
manufacturing efficiency, primarily at the 300mm (mili-meter) wafers manufacturing facility in |
||||||
|
Richmond, Virginia, and to a lesser extent at the backend facilities in Porto, Portugal and Suzhou, |
||||||
|
China. |
||||||
|
. Plans to invest up to $125mm for capacity upgrades at the 300mm manufacturing facility in |
||||||
|
Dresden, Germany. |
||||||
|
. Expects to invest remaining proceeds in equipment for technology and product research and |
||||||
|
development at R&D locations in Dresden, Germany and Xi’an, China and R&D locations in |
||||||
|
North America. |
||||||
|
. QU anticipates that it will take one year to make these investments. |
||||||
|
=========================================================== |
||||||
|
========================================================== |
||||||
|
Financial Performance & Scoring -- © 2006 Gaskins IPO Desktop/IPOdesktop |
||||||
|
Pre-IPO analysis -- updated July 28 |
||||||
|
. Business Model Rating Criteria |
||||||
|
A = high growth market, potential leader; B = more competitive market; C='public venture capital' |
||||||
|
. Calculations |
||||||
|
. IPO Price to annualized Sales Ratio -- (Price / Sales) |
||||||
|
Numerator |
Denominator |
|||||
|
IPO market capitalization… |
Annualized Sales (last quarter's revenues times 4) |
|||||
|
(post-IPO # of shares times mid-point of IPO price range) |
||||||
|
. IPO Price to annualized Earnings (loss) -- (Price / Earnings) |
||||||
|
Numerator |
Denominator |
|||||
|
IPO market cap |
Annualized Earnings (loss) from the last quarter |
|||||
|
========================================================================= |
||||||
|
SEARCH BY COMPANY |
Use 'Edit, find on this page' to search for companies |
|||||
|
for analysis |
scheduled below |
|||||
|
========================================================================= |
||||||
|
Summary ratios for the week of July 31 |
||||||
|
(P/E ratios based on annualizing the March quarter, unless otherwise noted) |
||||||
|
VALUATION RATIOS |
IPO Mrkt |
Price / |
Price / |
Price / |
Price / |
% offered |
|
Cap (mm) |
Sales |
Earnings |
BookValue |
TangibleBV |
in IPO |
|
|
Asset Capital (ACCI) |
$188 |
8.5 |
-28 |
1.2 |
1.3 |
47% |
|
real estate developer ( C, 4) |
Post-IPO shrs:20mm |
|||||
|
Buckeye GP L.P. (BGH) |
$566 |
not an operating co |
2.3 |
29.0 |
50% |
|
|
General Prnter of Buckeye (NYSE:BKL) (C+, 6) |
Post-IPO shrs: 28mm |
|||||
|
Osiris Thera(OSIR) |
$324 |
72.3 |
-16 |
6.9 |
6.7 |
13% |
|
stem cell treatments ( C, 7) |
Post-IPO shrs:27mm |
|||||
|
Security Capital (SCA) |
$1,410 |
4.0 |
12 |
1.1 |
1.1 |
35% |
|
insurance: credit enhancement/protection (B-, 7) |
Post-IPO shrs: 64mm |
|||||
|
========================================================================= |
||||||
|
SEARCH BY COMPANY |
Use 'Edit, find on this page' to search for companies |
|||||
|
for analysis |
scheduled below |
|||||
|
========================================================================= |
||||||
|
Analysis -- week of July 31 |
||||||
|
Asset Capital |
ACCI, C, 4 |
|||||
|
real estate developer |
Post-IPO shrs:20mm |
|||||
|
Bethesda, Maryland |
2005 |
3mos Mar31 |
IPO Mkt |
|||
|
Revenue ($mm) |
$20.9 |
$5.5 |
Cap (mm) |
|||
|
Net income (loss) $mm |
($5.4) |
($1.7) |
$188 |
|||
|
EBIDTDA |
$10.0 |
$2.2 |
9.5 |
|||
|
VALUATION RATIOS |
IPO Mrkt |
Price / |
Price / |
Price / |
Price / |
% offered |
|
Cap (mm) |
Sales |
Earnings |
BookValue |
TangibleBV |
in IPO |
|
|
Asset Capital (ACCI) |
$188 |
8.5 |
-28 |
1.2 |
1.3 |
47% |
|
SCORECARD |
Mgt |
Market |
Market Do- |
Proprie- |
Total |
|
|
1-5, 5 is high |
Growth |
mination |
tary |
rating |
||
|
20 is perfect |
1 |
1 |
1 |
1 |
4 |
|
|
Graded 4 because of self-dealing, see 'conflicts of interest' below |
||||||
|
Business |
||||||
|
. Self-managed real estate company focused on opportunistically acquiring, redeveloping, |
||||||
|
financing, managing and disposing of commercial real estate properties |
||||||
|
. Located primarily in the greater metropolitan Washington, D.C. marketplace and its surrounding |
||||||
|
areas, ranging generally from Baltimore, Maryland through Richmond, Virginia and the Hampton |
||||||
|
Roads, Virginia metropolitan statistical area. |
||||||
|
. Formed as a Maryland corporation on March 30, 2005, with transactions valued at $8.50 per |
||||||
|
share. |
||||||
|
Conflicts of Interest |
||||||
|
. Acquired five properties (Century South, Commerce Center I, Garden City Drive, Pidgeon Hill I |
||||||
|
and Pidgeon Hill II) and one structured real estate investment (Twelve Oaks) from the predecessor |
||||||
|
business. |
||||||
|
. Did not obtain third-party appraisals, nor did we receive any independent third-party valuations |
||||||
|
or fairness opinions in connection with these acquisitions. |
||||||
|
. The amount of consideration paid by us in each of these transactions was based upon |
||||||
|
management’s estimates of the fair market value of these assets, which was arrived at by applying |
||||||
|
a market capitalization rate determined by the founders and based on comparable transactions |
||||||
|
known to the founders, and was not the result of arm’s length negotiations. |
||||||
|
. The transactions were not approved by any of our independent directors. |
||||||
|
. In addition, the three founders, Messrs. Minshall, Fernau and LeBlanc, each of whom is an |
||||||
|
executive officer of the company, had significant influence in negotiating the acquisition of the |
||||||
|
aforementioned properties, had preexisting ownership interests in those assets and received |
||||||
|
substantial economic benefits as a result of these acquisitions. |
||||||
|
. The aggregate amount of consideration received by the three founders as a result of the |
||||||
|
acquisition of those assets is approximately $10.4 million, approximately $10.0 million of which |
||||||
|
was paid in shares of common stock valued at $8.50 per share, which was the offering price of our |
||||||
|
common stock in the 2005 private offering, and approximately $420,000 of which was paid in |
||||||
|
cash (approximately $136,000 for purchase price consideration and approximately $284,000 in |
||||||
|
distributions of lender reserves and prepaid items held by the entities that owned these properties). |
||||||
|
Dividend policy |
||||||
|
. On May 22, 2006, the board of directors declared a distribution of $0.11 per share of common |
||||||
|
stock. |
||||||
|
. This distribution was comprised of a special one-time cash distribution of $0.08 per share and a |
||||||
|
regular cash distribution of $0.03 per share. |
||||||
|
. This distribution constituted a return of capital and was funded the distribution out of available |
||||||
|
borrowings. |
||||||
|
Use of $67.5mm in IPO proceeds from sale of 8mm shares |
||||||
|
(shareholders intend to offer 1.25mm shares to net $10.5mm) |
||||||
|
• $41.9 million to fund the acquisition of the Lynnhaven Corporate Center, Southport Center, |
||||||
|
Twin Oaks I and Twin Oaks II properties (Gees Group portfolio) |
||||||
|
• $1.4 million to fund the acquisition of the Godwin Business Park property, including related |
||||||
|
transaction costs; |
||||||
|
• $6.9 million to fund the acquisition of the 4230 Forbes Boulevard property, including related |
||||||
|
transaction costs; |
||||||
|
• $10.0 million to repay the portion of the outstanding notes due August 16, 2006 on the |
||||||
|
Hollymead Town Center property incurred in connection with the property’s acquisition. These |
||||||
|
notes mature at varying dates through August 2009 and have a current interest rate of 8%; |
||||||
|
• any remaining proceeds to fund working capital needs and investments in additional office |
||||||
|
properties and related assets |
||||||
|
======================================================== |
||||||
|
Buckeye GP L.P. |
BGH, C+, 6 |
|||||
|
General Prnter of Buckeye (NYSE:BKL) |
Post-IPO shrs: 28mm |
|||||
|
Emmaus, PA |
see note below |
IPO Mkt |
||||
|
Gross Premiums ($mm) |
not an operating company |
Cap (mm) |
||||
|
Net income (loss) $mm |
$566 |
|||||
|
Net income % |
@$20 |
|||||
|
Note: |
||||||
|
Limited Partnership Units spin-off from Buckeye (NYSE:BKL) |
||||||
|
. VEH anticipates an initial quarterly cash distribution of $0.205 per share, |
||||||
|
4.1% annual return at $20 per unit |
||||||
|
VALUATION RATIOS |
IPO Mrkt |
Price / |
Price / |
Price / |
Price / |
% offered |
|
Cap (mm) |
Sales |
Earnings |
BookValue |
TangibleBV |
in IPO |
|
|
Buckeye GP L.P. (BGH) |
$566 |
see above note |
2.3 |
29.0 |
50% |
|
|
Partnership units |
||||||
|
Business (not an operating company) |
||||||
|
. Primary cash-generating assets are the general partner interests in Buckeye Partners, |
||||||
|
L.P.(NYSE:BKL) and its operating subsidiaries, which consist primarily of GP units and the |
||||||
|
incentive distribution rights in Buckeye Partners, L.P. |
||||||
|
. Cash flow is, therefore, directly dependent upon the ability of Buckeye Partners, L.P. to make |
||||||
|
cash distributions to its partners. |
||||||
|
. Buckeye Partners, L.P.(NYSE:BKL), $1.7 billion market cap |
||||||
|
Dividend policy |
||||||
|
Initial quarterly cash distribution of $0.205 per share, 4.1% annual return at $20 per unit |
||||||
|
Use of $264.6mm in IPO proceeds |
||||||
|
. Repay $169mm of debt |
||||||
|
. $1.9mm in transactions costs |
||||||
|
. $94mm of distributions to pre-IPO shareholders |
||||||
|
======================================================= |
||||||
|
Osiris Therapeutics |
OSIR, C, 7 |
|||||
|
stem cell treatments |
Post-IPO shrs:27mm |
|||||
|
Baltimore, Maryland |
2003 |
2004 |
2005 |
3mos Mar31 |
IPO Mkt |
|
|
Product Rev ($mm) |
$0.0 |
$0.0 |
$1.0 |
$1.1 |
Cap (mm) |
|
|
Gross Profit |
51.3% |
56.0% |
$324 |
|||
|
Research & grant reve |
$4.0 |
$4.0 |
$3.0 |
$0.3 |
@$12 |
|
|
Net los |
($19.7) |
($10.5) |
($20.0) |
($5.0) |
||
|
VALUATION RATIOS |
IPO Mrkt |
Price / |
Price / |
Price / |
Price / |
% offered |
|
Cap (mm) |
Sales |
Earnings |
BookValue |
TangibleBV |
in IPO |
|
|
Osiris Thera(OSIR) |
$324 |
72.3 |
-16 |
6.9 |
6.7 |
13% |
|
SCORECARD |
Mgt |
Market |
Market Do- |
Proprie- |
Total |
|
|
1-5, 5 is high |
Growth |
mination |
tary |
rating |
||
|
20 is perfect |
2 |
2 |
1 |
2 |
7 |
|
|
Business |
||||||
|
. Stem cell therapeutic company focused on developing and marketing products to treat medical |
||||||
|
conditions in the inflammatory, orthopedic and cardiovascular areas. |
||||||
|
. One marketed product, Osteocel, and three biologic drug candidates in clinical development |
||||||
|
. OSIR is a fully integrated company having developed stem cell capabilities in research and |
||||||
|
development, manufacturing, marketing and distribution. |
||||||
|
Current product -- Osteocel |
||||||
|
. Currently markets and sells Osteocel for regenerating bone in orthopedic indications. |
||||||
|
. It is the only commercially available product in the United States containing viable stem cells |
||||||
|
Biologic Drug Candidates |
||||||
|
. Prochymal, the lead biologic drug candidate, for the treatment of inflammatory disease, is the |
||||||
|
only stem cell therapeutic for which patients are being enrolled in Phase III clinical trials and is |
||||||
|
the only stem cell therapeutic currently designated by the FDA as both an Orphan Drug and Fast |
||||||
|
Track product. |
||||||
|
. Pipeline of internally developed biologic drug candidates also includes Chondrogen, for |
||||||
|
regenerating cartilage in the knee, and Provacel, for repairing heart tissue following a heart attack. |
||||||
|
Technology -- Mesenchymal stem cells, or MSCs |
||||||
|
. Osteocel and OSIR’s biologic drug candidates utilize human mesenchymal stem cells, or MSCs. |
||||||
|
. OSIR obtains MSCs for use in its biologic drug candidates from the adult bone marrow of |
||||||
|
volunteer donors. |
||||||
|
. MSCs are progenitor cells that have strong anti-inflammatory properties, prevent scarring, and |
||||||
|
can regenerate and repair damaged tissue. |
||||||
|
Biologic Drug Candidates |
||||||
|
OSIR believes its biologic drug candidates have advantages over other stem cell therapeutics in |
||||||
|
development for the following reasons: |
||||||
|
• Stem Cell Source. OSIR’s stem cells are obtained from adult bone marrow, a readily available |
||||||
|
source. OSIR obtains this bone marrow from volunteer donors between the ages of 18 and 30. |
||||||
|
• Ability to Mass Produce. Through proprietary manufacturing methods, OSIR can grow MSCs in |
||||||
|
a controlled fashion to produce up to 5,000 treatments from a single bone marrow donation. |
||||||
|
• Universal Compatibility. Many stem cell therapies under development can elicit a rejection |
||||||
|
response in the recipient and therefore require donor-to-recipient matching or potentially harmful |
||||||
|
immunosuppression. Based on OSIR’s clinical experience, OSIR believes that its biologic drug |
||||||
|
candidates are not rejected by the patient's immune system and therefore do not require matching. |
||||||
|
• Treatment on Demand. OSIR’s biologic drug candidates can be stored frozen at the point of care |
||||||
|
and, therefore, can be readily available to treat patients on demand. In contrast, other stem cell |
||||||
|
technologies under development require weeks to prepare after a patient's need is identified. |
||||||
|
• OSIR has leveraged its MSC manufacturing, clinical and preclinical experience and proprietary |
||||||
|
know-how to advance three biologic drug candidates into the clinic. |
||||||
|
Growth plan |
||||||
|
. While OSIR has achieved commercialization of its Osteocel product, the principal focus is on the |
||||||
|
successful development and commercialization of the biologic drug candidates, the most clinically |
||||||
|
advanced of which is Prochymal. |
||||||
|
. OSIR expects Osteocel sales to increase moderately as it achieved greater market penetration and |
||||||
|
manufacturing capacity is increased. |
||||||
|
. However, over the next several years, the principal capital requirements and greatest source of |
||||||
|
operating losses will likely relate to the continued preclinical and clinical development of the |
||||||
|
biologic drug candidates and related regulatory and pre-commercialization activities. |
||||||
|
. OSIR believes these potential products have the greatest long-term potential for revenue and |
||||||
|
profitability, and OSIR expects to focus its management and financial resources principally on |
||||||
|
them. |
||||||
|
Competition |
||||||
|
• Osteocel. Our commercialized bone regeneration product competes with autograft bone, |
||||||
|
synthetic biomaterials, growth factors and allograft bone. Competing products include Medtronic's |
||||||
|
InFuse, Stryker's OP-1, numerous bone void filler products such as Zimmer's CopiOs™ and |
||||||
|
autologous bone marrow products such as DePuy Acromed's CELLECT™. |
||||||
|
• Prochymal. If approved, Prochymal will compete with approved products such as Novartis' |
||||||
|
Neoral® for the prevention of organ rejection in kidney, liver, and heart allogeneic transplant |
||||||
|
patients, Centocor's Remicade® for Crohn's Disease and if approved DOR BioPharma's orBec® |
||||||
|
for gastrointestinal GvHD. |
||||||
|
• Chondrogen. If approved, Chondrogen will compete with products such as allograft menisci |
||||||
|
from cadavers, Conmed Linvatec's meniscal fixation system of screws and arrows and if approved, |
||||||
|
Regen Biologics' Collagen Meniscus Implant. |
||||||
|
• Provacel. If approved, Provacel will compete with pharmaceutical therapies, mechanical |
||||||
|
therapies and cellular based therapies. Pharmaceutical therapies include anti-thrombotics, calcium |
||||||
|
channel blockers such as Pfizer's Norvasc® and ACE inhibitors such as Sanofi's Delix®. |
||||||
|
Mechanical therapies such as biventricular pacing, ventricular restraint devices and mitral valve |
||||||
|
therapies have been developed by companies such as Medtronic, Acorn Cardiovascular and |
||||||
|
Edwards Lifesciences. Cellular based therapies such as skeletal myoblasts and embryonic stem |
||||||
|
cells are being pursued by companies such as Bioheart, MG Biotherapeutics, a joint venture |
||||||
|
created by Medtronic and Genzyme, and Geron. |
||||||
|
• OSIR is aware of many companies working in this area, including: Aastrom Biosciences, |
||||||
|
Advanced Cell Technology, Athersys, Cellerant Therapeutics, Cognate Therapeutics, Cytori |
||||||
|
Therapeutics, Gamida Cell, Geron, Mesoblast, MultiCell Technologies, Neuronyx, Theradigm, |
||||||
|
ViaCell and StemCells. |
||||||
|
Use of $37.5mm in IPO proceeds |
||||||
|
• $13 million for conducting a Phase III clinical trial for Prochymal to treat steroid refractory |
||||||
|
GvHD; |
||||||
|
• $3 million for initiating a Phase III clinical trial for Chondrogen; |
||||||
|
• $10 million in total for completing separate Phase II clinical trials for Prochymal to treat acute |
||||||
|
GVHD and Crohn's disease, a Phase I/II clinical trial for Chondrogen and a Phase I clinical trial |
||||||
|
for Provacel; and |
||||||
|
• $3 million for preclinical and other clinical research and development relating to our biologic |
||||||
|
drug candidates. |
||||||
|
• Balance of the proceeds for other general corporate purposes |
||||||
|
========================================================== |
||||||
|
Security Capital |
SCA, B-, 7 |
|||||
|
insurance: credit enhancement/protection |
Post-IPO shrs: 64mm |
|||||
|
Hamilton HM 11, Bermuda |
2003 |
2004 |
2005 |
6mos 6/30 |
IPO Mkt |
|
|
Net Premiums written ($mm) |
$252 |
$268 |
$245 |
$176 |
Cap (mm) |
|
|
Net Premiums earned ($mm) |
$103 |
$116 |
$152 |
$93 |
$1,410 |
|
|
Net income ($mm) |
$71 |
$75 |
$89 |
$59 |
@$22 |
|
|
Net income % |
28.2% |
28.0% |
36.3% |
33.5% |
||
|
Combined ratio* |
76.2% |
75.6% |
69.7% |
51.6% |
||
|
*Exp & loss |
||||||
|
Loss ratio |
19.4% |
18.3% |
17.1% |
6.8% |
||
|
Notice the strong performance for the six months ended June 30 |
||||||
|
VALUATION RATIOS |
IPO Mrkt |
Price / |
Price / |
Price / |
Price / |
% offered |
|
Cap (mm) |
Sales |
Earnings |
BookValue |
TangibleBV |
in IPO |
|
|
Security Capital (SCA) |
$1,410 |
4.0 |
12 |
1.1 |
1.1 |
35% |
|
SCORECARD |
Mgt |
Market |
Market Do- |
Proprie- |
Total |
|
|
1-5, 5 is high |
Growth |
mination |
tary |
rating |
||
|
20 is perfect |
2 |
2 |
2 |
1 |
7 |
|
|
Business |
||||||
|
. Provides financial guaranty insurance (86%) and financial guaranty reinsurance (14%), |
||||||
|
throughout the US and internationally |
||||||
|
. Credit enhancement and protection provided through the issuance of financial guaranty insurance |
||||||
|
policies and credit default swaps, as well as the reinsurance of financial guaranty insurance and |
||||||
|
credit default products written by other insurers. |
||||||
|
Established Triple-A Franchise |
||||||
|
. SCA is one of six financial guarantors with triple-A ratings from Moody’s, S&P and Fitch and |
||||||
|
the only financial guaranty reinsurer with triple-A ratings from Moody’s, S&P and Fitch. |
||||||
|
. In the principal market for financial guaranty insurance, typically there is either a requirement or |
||||||
|
strong commercial preference for triple-A-rated insurance policies. |
||||||
|
. In the reinsurance market, a triple-A-rated reinsurer provides greater rating agency capital relief |
||||||
|
to the ceding insurer than a lower-rated reinsurer. Triple-A ratings and market acceptance are |
||||||
|
difficult and time-consuming to achieve in the financial guaranty industry. |
||||||
|
History & ratings |
||||||
|
. Subsidiaries began providing financial guaranty reinsurance in 1999 and direct financial guaranty |
||||||
|
insurance in 2000. |
||||||
|
. Insurance and reinsurance subsidiaries are rated "Aaa" by Moody’s Investors Service, Inc., |
||||||
|
which we refer to as "Moody’s," "AAA" by Standard & Poor’s, a division of the McGraw-Hill |
||||||
|
Companies, Inc., which we refer to as "S&P," and "AAA" by Fitch, Inc. |
||||||
|
. Each of these ratings is the highest applicable rating available from that agency. Ratings are a |
||||||
|
measure of SCA subsidiaries’ ability to meet obligations to their policyholders and not an |
||||||
|
evaluation of SCA or an investment in SCA’s securities, including the shares of common stock |
||||||
|
offered hereby. |
||||||
|
Dividend policy |
||||||
|
. Intends to pay quarterly cash dividends of $.02 per common share. |
||||||
|
. The first such dividend is expected to be declared in the fourth quarter of 2006 and paid in the |
||||||
|
first quarter of 2007. |
||||||
|
. 0.36% annualized rate of return at $22 (mid-point of price range) |
||||||
|
Competition |
||||||
|
Financial guaranties |
||||||
|
. Principal competitors in the market for financial guaranties are Ambac, FGIC, FSA and MBIA, |
||||||
|
which are larger than we are, as well as recent entrants CIFG and Assured Guaranty, each of |
||||||
|
which has "AAA" and "Aaa" ratings from S&P and Moody’s (except for Assured Guaranty, |
||||||
|
which has a "Aa1" rating from Moody’s). |
||||||
|
. Banks, hedge funds, smaller and lower-rated financial guaranty insurance companies and |
||||||
|
multiline insurers and reinsurers also participate in the broader credit enhancement market. The |
||||||
|
principal competitive factors are: (1) premium rates; (2) conditions precedent to the issuance of a |
||||||
|
policy related to the structure and security features of a proposed bond issue; (3) the financial |
||||||
|
strength ratings of the guarantor; and (4) the quality of service and execution provided to issuers, |
||||||
|
investors and other clients of the issuer. |
||||||
|
. Financial guaranty insurance also competes domestically and internationally with other forms of |
||||||
|
credit enhancement, including the use of senior and subordinated tranches of a proposed structured |
||||||
|
finance obligation and/or over-collateralization or cash collateral accounts, as well as more |
||||||
|
traditional forms of credit support. |
||||||
|
Reinsurance of financial guaranties |
||||||
|
Note: SC is currently the only financial guaranty reinsurer with triple-A ratings from each of |
||||||
|
Moody’s, S&P & Fitch. |
||||||
|
. Competitors in the market for reinsurance of financial guaranties include Assured Guaranty Re |
||||||
|
Ltd., Ram Reinsurance Company Ltd., Channel Reinsurance Ltd., BluePoint Re Limited and |
||||||
|
Radian Asset Assurance Inc., as well as several multiline insurance companies. |
||||||
|
. Also competes directly and indirectly with providers of certain credit default swaps and other |
||||||
|
alternative transaction structures that may be a more attractive alternative to traditional financial |
||||||
|
guaranty reinsurance. |
||||||
|
. Primary financial guaranty companies choose reinsurance providers based upon several factors, |
||||||
|
including overall financial strength, financial strength ratings by the major rating agencies, |
||||||
|
financial enhancement rating (which determines capital relief under the S&P capital model), single |
||||||
|
risk capacity, level of service quality and in some cases whether or not the reinsurer or its affiliate |
||||||
|
competes with the primary company. |
||||||
|
. In addition, issuers may choose to divide large transactions among several primary insurers, |
||||||
|
reducing or eliminating the need for reinsurance. |
||||||
|
. Primary insurers may also choose to reinsure transactions with other primary insurers directly, |
||||||
|
also reducing or eliminating the need for reinsurance. |
||||||
|
Use of $367mm in IPO proceeds |
||||||
|
. Intends to retain less than 10% of such net proceeds for general corporate purposes and to |
||||||
|
contribute over time the balance of such net proceeds to the capital of insurance and reinsurance |
||||||
|
subsidiaries |
||||||
|
. To support future growth in their respective businesses (currently expected to be principally the |
||||||
|
payment of SCA’s operating expenses and payment of dividends on SCA common shares, which, |
||||||
|
based upon above dividend policy is not expected to exceed $8.0 million in the first full four |
||||||
|
quarter period following this IPO |
||||||
|
====================================================================== |
||||||