Citigroup spinoff Primerica goes public this week
Citigroup‘s spinoff of Primerica, a commission-based network of independent sales representatives selling life insurance and investment products, is one of four companies expected to go public this week as the market for initial public offerings appears positioned for a comeback.
Analysts are optimistic about most of this week’s deals, especially as recent IPOs — most notably chipmaker MaxLinear and advisory firm Financial Engines — were well-received.
Many IPOs that have made it to market this year have had to accept lower prices for their shares because of a volatile stock market and worries about companies’ debt loads, weak operating histories and slow growth. Those scheduled for this week, however, have little to no debt.
“This is a step in the right direction, as we’re moving away from deals with low revenue growth, losses and high debt that become fire sales,” says IPO market tracker Scott Sweet of IPO Boutique.
The biggest name on the roster is Primerica, which Citigroup is divesting to simplify its operations and reduce debt. Citigroup has already sold its commodities trading unit, its Japanese brokerage and some credit card assets.
The bank hopes to raise $234 million for the unit by selling 18 million shares for $12 to $14 apiece under the symbol PRL.
Primerica has about 100,000 representatives selling life insurance and investment products. IPO followers say the Primerica offering should fare well because it’s priced right. Many IPOs this year have stumbled in their debuts because competition between investment bankers inflated offering prices.
“This is one of Citigroup’s last remaining gems,” Sweet says. “They will do everything they can to make this deal work.” Also expected this week:
•SS&C Technologies, which makes software for automating computer functions at financial services firms. The Windsor, Conn., company, which plans to raise about $150 million selling 10.7 million shares priced at $13 to $15 under the symbol SSNC.
The company could benefit from the recent interest in technology companies, says John Fitzgibbon of IPO Scoop.com.
•Wireless network provider Meru Networks hopes to raise $61.4 million, selling 4.4 million shares for $13 to $15 under the symbol MERU.
•Shipper Scorpio Tankers expects to raise about $187.5 million. The shipping industry has been hurt by sluggish global demand for commodities such as oil, cement, iron ore and coal. Scorpio plans to sell 12.5 million shares for $14 to $16 each under the symbol STNG.