October 20 -- Standby generator maker Generac Holdings Inc. (Generac Power Systems) has registered for an initial public offering of up to $300 million in shares, the second IPO filing by a company managed by private equity firm CCMP Capital LLC this month.
Exact details on price and number of shares to be offered are not yet available, but it appears that Generac itself will be selling all the shares. The company said it intends to use the proceeds to pay down a portion of its first- and second-lien term loans.
The company was founded in 1959 in a garage in Waukesha by entrepreneur Robert Kern, who sold a controlling stake in 2006 to CCMP Capital Advisors LLC, a Manhattan-based private equity firm. Kern used much of his share of the buyout to create the Kern Family Foundation, which supports science programs and educational reform meant to make the nation more competitive.
The company's headquarters and flagship production site is in the Town of Genesee near Waukesha. It also has two other Wisconsin production facilities in Whitewater, where it makes engines and generators, and Eagle, where it does metal fabrication.
The Wisconsin company makes generators with an output of 800 Watts to 9 megawatts of power and fueled by natural gas, liquid propane, gasoline, and diesel.
Generac is a boom-era deal for CCMP, which together with Unitas Capital Pte Ltd. and management bought the company in November 2006 for roughly $2 billion. According to the IPO filing, that included the purchase of $689 million of its equity and the borrowing of an aggregate of $1.4 billion.
Since the transaction, CCMP has been delevering the company by buying back its debt. According to the filing, CCMP bought up $259.1 million of the company's debt between September 2007 and July 2009, which Generac exchanged for common and preferred stock. Nonetheless, Generac failed to satisfy a leverage ratio in its senior secured credit facilities at Sept. 30, 2008, a default that CCMP cured with an equity contribution of $15.5 million.
As of Sept. 30, CCMP owned 76.5% of the company's Class B common stock and 99.4% of its Series A preferred stock.
The company, which plans to list on the New York Stock Exchange under the symbol GNRC, saw sales rise to $290 million from $236.6 million for the six months ended June 30 from a year earlier. Net income was $11.8 million, a reversal from a loss of $27 million a year earlier.
J.P. Morgan Securities Inc. and Goldman Sachs & Co. are acting as joint book-running managers.
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