--Realogy prices its $1.08 billion IPO at the high end of its
expected range
--Intercept Pharmaceuticals, Kythera Biopharmaceuticals' also
price IPOs at high end of range
--IPOs are expected to begin trading Thursday
(Updates with pricing details for Intercept and Kythera)
By Chris Dieterich
NEW YORK--Realogy Holdings Corp. was among three deals that
priced their initial public offering at the high end of their
expected ranges late Wednesday, a bright spot after a period that
had seen newly public companies mostly fetch lower prices than
expected.
Realogy's IPO priced its 40 million shares at $27 each. Its
expected range was $23 to $27. The deal, worth $1.08 billion, is
among the largest of the year in the U.S.
Realogy, based in Parsippany, N.J., will begin trading on the
New York Stock Exchange on Thursday under the symbol RLGY.
The company is the largest U.S. residential real-estate-services
firm by revenue. It owns and franchises residential-real-estate
brokerages including Century 21, Coldwell Banker, ERA and Better
Homes and Gardens Real Estate. Brokers earn revenue from fees and
commissions that are based on a percentage of the home prices when
properties are sold.
Realogy's IPO is set to launch some five years after
private-equity firm Apollo Global Management LLC (APO) bought the
company around the time housing prices peaked. The highly
leveraged, $8.5 billion deal left the company with a hefty debt
load.
Realogy said it plans to use proceeds from the IPO to pay down
debt. Realogy's long-term debt totaled $7.1 billion as of June 30,
according to a Tuesday regulatory filing.
The housing market has shown signs of recovery in recent months,
with sales picking up and home prices firming.
During the first eight months of 2012, Realogy's volume of
completed home sales, or the average sale price multiplied by
number of transactions, increased 13% from the same period a year
earlier.
In its most recent quarter, Realogy booked net revenue of $1.3
billion, up 11% from the year earlier, though the decline in net
earnings widened 9% to $24 million.
Apollo Funds owned 73% of Realogy ahead of the deal and will
retain a roughly 50% stake afterward. Hedge-fund firm Paulson &
Co. held a 15% stake that will fall to about 10% after the
offering.
Also pricing late on Wednesday were a pair of IPOs from
biopharmaceutical companies, both of which bucked the recent trend
and priced their deals at the high ends of their expected ranges.
Both added to the number of shares they will sell.
Intercept Pharmaceuticals Inc., sold 5 million shares at $15
each. The company sold 16% more shares than were outlined in
regulatory filings.
Meanwhile, Kythera Biopharmaceuticals Inc. sold 4.4 million
shares at $15 apiece. The number of shares sold was 10% more than
expected. Both stocks will debut Thursday on Nasdaq Stock Market,
under the tickers ICPT and KYTH, respectively.
An Apollo-backed IPO is the largest deal of the week for the
second week in a row. Berry Plastics Group Inc.'s (BERY) $470
million IPO fell in its debut last week and closed Wednesday down
12% from its offering price.
The recent track record for Apollo-backed IPOs has been
checkered. In August, Momentive Performance Materials Holdings LLC
withdrew its $862.5 million offering. Also that month, CKE Inc.
(CK), operator of Carl's Jr. and Hardee's fast-food restaurants,
postponed its $200 million IPO, citing unfavorable market
conditions.
By and large, IPOs have failed to lock in their originally
forecast offer prices in recent weeks. Two deals that hit markets
Wednesday--Ambarella Inc. (AMBA) and Amira Nature Foods Ltd.
(ANFI)--each priced below expectations.
Goldman Sachs Group Inc. (GS) and J.P. Morgan Chase & Co.
(JPM) served as lead underwriters for the Realogy deal.
Write to Chris Dieterich at
christopher.dieterich@dowjones.com
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