tybs
Cheez Whiz-The Latest LFYT
the amount of these coming out is ridiculous, not even trying to hide it any longer-but that's what they do, offload liability.
So far this year, the Renaissance U.S. IPO Index is up a cool 32%, more than double the 15% advance logged by the S&P 500. The booming market for new issues is making bull-market noises.
(of course it is!)
This morning, CEC Entertainment, Inc., parent company of children’s restaurant Chuck E. Cheese’s, announced plans to list shares on the New York Stock Exchange. This will be no straightforward offering. Instead, the transaction will feature a reverse merger between CEC’s own parent company Queso Holdings, Inc. with a special purpose acquisition company called Leo Holdings Corp. The press release explains:
*Concurrent with the closing of the transaction, Leo will domesticate as a Delaware corporation, following which Queso will merge with and into Leo with the result that CEC will continue as a wholly-owned subsidiary of Leo, which will be renamed Chuck E. Cheese Brands, Inc.
CEC was bought by Apollo Global Management, LLC in 2014 for $1.3 billion including debt. In February 2017 Reuters reported that the private equity giant had hired Deutsche Bank A.G. and Credit Suisse A.G. to solicit bids for its portfolio company, with Bloomberg reporting that Apollo was seeking a roughly $2 billion sale price.
With no buyer in hand, the deal was withdrawn six months later. As a public entity, CEC is expected to garner an enterprise valuation of about $1.4 billion, which is 7.5 times forecast 2019 adjusted EBITDA of $187 million, while the anticipated $300 million of proceeds “will be used to pay transaction expenses and de-leverage the Company’s existing capital structure.”
De-leveraging appears wise. CEC ended 2018 with total debt of $982 million, 6.5 times trailing 12-month adjusted EBITDA, while operating income of $66 million failed to cover the $76.3 million in interest expense.
As Chuck-E-Cheese’s prepares to re-join the ranks of publicly-traded companies, recent IPO Lyft, Inc. has a bone to pick with its underwriters. Digital news site The Information relayed Friday that the ride-share company, which debuted on March 29, threatened to sue Morgan Stanley after the New York Post reported the investment bank had offered Lyft investors a chance to hedge their positions through short sales, despite being subject to lock-up restrictions.
For Lyft, which generated a $943 million adjusted-EBITDA loss in 2018 on revenues of $2.2 billion and warned in its S-1 filing that it “may not be able to achieve or maintain profitability in the future,” the attention paid to short-sellers has been mutual. According to S3 Partners, LLC, short interest in LYFT exceeded 38% of the 32.5 million share float as of Tuesday, despite prohibitive borrowing costs that reached an annualized rate 101.4% as of Tuesday. Lyft stock finished the day at $70.23 a share, down from the $72 issue price and 20% below the intraday peak see on its March 29 debut.
*Meanwhile, new issue supply continues apace as the IPO pipeline remains robust. This morning, social media site Pinterest, Inc. filed a form S-1 detailing plans to offer up to 75 million shares at a range of $15 to $17 per share, valuing the company at $11.3 billion using the high end of the range. That’s down from a $12.3 billion valuation achieved during the most recent fundraising round in 2017. As noted by Business Insider on March 24, an unusual bit of language in Pinterest’s filing may give some investors pause:
(ya think?)
*Pinterest's S-1 paperwork, filed publicly Friday, disclosed an unusual stipulation that retains full voting rights for CEO Ben Silbermann's shares in the company from 90 days to 540 days after his "death or permanent incapacity."
*The clause means that after Silbermann dies, whoever inherits his shares will retain his super-voting powers for a period of time
https://www.zerohedge.com/news/2019-04-08/cheez-whiz
little one and parents doing ok?
great to hear. Best to everyone!