Apollo goes ahead with IPO, but cuts price

Apollo Global Management, the private-equity firm headed by Leon Black, has bounced back so well from some embarrassing leveraged buyouts that it now plans to go public, like its rivals Blackstone Group and Kohlberg Kravis Roberts.

Leon Black

New York-based private equity giant Apollo Global Management has pressed ahead with its planned initial public offering (IPO), but cut its price range compared to earlier estimates.

The firm will now seek to sell 26.3 million shares at between $17 and $19 each, and will trade under the ticker symbol APO, according to a filing with US regulators.

Earlier reports put it on the point of announcing an $18 to $20 per share range last week, but the filing was delayed as stock markets tumbled after Japan’s earthquake and nuclear accident. At the mid-point of the new range, the offering will raise $473m.

Eighteen million shares will be sold by Apollo itself, with the remaining 8.3 million coming from existing stakeholders including Goldman Sachs, which is also among the underwriters.

The shares on sale represent only a fraction of the firm’s total equity, which is valued at $2.1bn. It has $67bn in assets under management.

Founders Leon Black, Josh Harris and Marc Rowan retain majority ownership of Apollo and control the company through a single Class B share, giving them 81 per cent of voting rights.

In a separate filing on the same day, Apollo Residential Mortgage, an investor in residential mortgage-backed securities and managed by an Apollo subsidiary, filed for an IPO, hoping to raise $300m.

When it goes public, Apollo will join two of the biggest private equity firms – Blackstone, which went public in June 2007, and KKR, which followed in July last year. Peers like Carlyle, TPG and Oaktree Capital Management are expected to follow.

Leon Black's Apollo Global Management is likely to score nicely in its initial public offering. Here's how it stacks up against two big rivals.

	Recent	EPS		P/E	Tangible	Mkt
Company/Ticker	Price	'10E	'11E	'11E	Book / Share	Val (bil)
Apollo Global/APO	$18.00*	$3.00	$2.00	9.0	$4.00	$6.4
Blackstone/BX	18.56	1.26	1.59	11.9	4.35	21.0
KKR/KKR	17.64	1.90	2.09	8.4	8.38	12.2
*Mid-point of IPO pricing range. E=Estimate. Sources: Bloomberg; Company reports; Barron's

Although the firm has had some notable failures, its overall private-equity record is excellent.
Managed	Total	Fee-	Historic
Assets	(bil)	Paying (bil)	Performance*
Private Equity	$38.8	$27.9	26%
Capital Markets	22.3	16.5	NA
Real Estate	6.5	2.7	NA
Total	67.6	47.1
*Annualized return since 1990 inception. NA=Not Available. Source: Company reports

McDonald’s Argentina Operator Arcos Dorados Plans $1.08 Billion Share Sale

(Reuters) — Arcos Dorados Holdings Inc, a large South American franchisee of U.S. fast-food chain McDonald's Corp., is planning to raise about $875 million in a stock offering and list its shares on the New York Stock Exchange.

Arcos Dorados said in a filing with U.S. regulators that it is the Oak Brook-based hamburger chain's largest franchisee in terms of sales and number of restaurants.

It is planning to sell 62.5 million shares for between $13 and $15 apiece but did not give an expected timing for its initial public offering.

The company, based in Argentina, says it accounted for 5.1 percent of McDonald's global sales in 2010. It has been a franchisee since 2007.

About 80 percent of the shares in the IPO are being sold by Arcados shareholders DLJ South American Partners L.P., DLJSAP Restco Co-Investments LLC, Capital International Private Equity Fund V L.P, CGPE V L.P and Gavea Investment AD L.P.

Arcos Dorados, which means Golden Arches in Spanish, said it agreed with McDonald's to use the $150 million in net proceeds it expects from the IPO for capital expenditures such as opening and remodeling restaurants.

As of Dec. 31, 2010, it operated 1,755 restaurants in 19 countries, including in Mexico, Argentina and Brazil.

Bank of America Merrill Lynch, J.P. Morgan, Morgan Stanley, Itau BBA and Citigroup are the lead underwriters of the IPO.

The company had revenues of $3.02 billion in 2010, up 14.1 percent from a year earlier, and net income of $106.3 million, compared to $80.4 million a year before.

Servicesource International (SREV) started trading on the NASDAQ

ServiceSource International, LLC (ServiceSource) is engaged in service revenue management, providing solutions that drive renewals of maintenance, support and subscription agreements for technology companies. The Company's solution consists of a range of cloud applications, service sales teams working under its customers’ brands and a Service Revenue Intelligence Platform. It provides end-to-end management and optimization of the service contract renewals process, including data management, quoting, selling and service revenue business intelligence.

Its business is built on its pay-for-performance model, whereby customers pay the Company based on renewal sales that it generates on their behalf. As of December 31, 2010, it managed over 100 engagements across 55 customers. The solution consist of its Service Revenue Intelligence Platform, its cloud applications, and its service sales teams. Its scalable solution allows it to sell globally on behalf of its customers in over 30 languages.

GM goes below IPO price

The chart below compares the performance of GM and the Standard & Poor’s 500 Index since Nov. 17, when the shares were sold at $33 apiece as part of an initial public offering. The sale of common and preferred stock totaled $23.1 billion.

Since the beginning of last week, GM has changed hands for less than its IPO price. The stock reached bottom three days ago at $30.65, down 22 percent from its peak on Jan. 6.

“GM needs to earn back investors’ trust,” H. Peter Nesvold, an analyst at Jefferies & Co., wrote today in a report.
Buyer incentives rose in January and February, causing concern that the automaker may be like “a ‘yo-yo dieter’ falling back into bad habits.”
Nesvold, who made Zacks Investment Research’s All-Star Analyst Survey list while at Bear Stearns Cos., began coverage with a “hold” rating. He sees the stock ending the year at $34, the lowest price estimate of analysts surveyed by Bloomberg.

GM’s IPO followed a bankruptcy reorganization with $49.5 billion in government aid. The U.S. Treasury owns 33 percent of the automaker’s shares and needs to sell them for an average of $53.07 each to break even, according to a GM regulatory filing and data compiled by Bloomberg.

Cornerstone OnDemand (CSOD) started trading on the NASDAQ on March 17, 2011

August 2021: Cornerstone OnDemand Inc. was acquired by private equity firm Clearlake Capital Group in a deal estimated to be worth $5.2 billion.

Cornerstone OnDemand, Inc. (Cornerstone OnDemand) is a global provider of learning and talent management solution delivered as software-as-a-service (SaaS). Cornerstone OnDemand offers a learning and talent management solution that its clients use to develop, connect, evaluate and engage their employees, customers, vendors and distributors. Cornerstone OnDemand delivers its solution on-demand to its clients who access it over the Internet using a standard Web browser.

The Company has approximately 4.92 million users across 164 countries and 23 languages. At December 31, 2010, it had approximately 480 clients with approximately 4.92 million registered users in 164 countries. The Company’s solution consists of five integrated platforms for learning management, enterprise social networking, performance management, succession planning and extended enterprise. Cornerstone OnDemand also provides consulting services for configuration, integration and training for its solution.