IPO News: TPG Partners eyes $9.5-bln valuation in mega listing. What to look for

Continuing the hectic IPO activity seen last year, the market is bracing for some of the keenly awaited initial public offerings. It is estimated that more than $450 billion was raised in IPOs last year when the fundraising spree reached a peak, led by tech startups and healthcare firms.

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The closely-followed IPO of TPG Partners LLC is expected to set the stage for an upswing in private equity public listings this year, considering the sharp increase in buyout deals. The Texas-based firm, a market leader in alternative asset management, is preparing for an initial public offering that is expected to lift its market capitalization to $9.5 billion.

34 Mln Shares

The company in a regulatory filing this week revealed plans to offer around 33,900,000 shares, which includes 5,589,806 shares offered by an existing shareholder. The estimated offer price is between $28 and $31 per share. After obtaining the required regulatory sanction, the stock will start trading on the Nasdaq stock market under the ticker symbol TPG.

The lead underwriters of the offering are J.P.Morgan, Goldman Sachs & Co., Morgan Stanley, and TPG Capital BD. A major portion of the funds raised through the offering will be used for acquiring partnership interests in TPG Partners, from other investors. The other priorities include expanding into new geographical regions and diversifying into new businesses, besides ramping up overall operations.

The Market

Favorable interest rates and a booming buyout industry –thanks to the ongoing economic recovery from the pandemic — are brightening the prospects of the private equity industry. When it comes to the timing of the IPO, the positive market environment seems to have influenced the company, which has been building investor confidence ever since suffering a setback during the financial crisis.

TPG was founded as a family office by Jim Coulter and David Bonderman more than three decades ago. With a total of around $109 billion in assets under management (AUM), the TPG ecosystem includes 280 active portfolio companies from 30 countries. The experienced management team is led by Jon Winkelried who assumed the role of the chief executive officer last year.

The positive trends driving growth for the industry include the ongoing shift of AUM towards private equity, growing demand for specialized products and expanding cross-platform relationships, increasing preference towards sector-focused products, growth-oriented investing, and international diversification.  

Key Numbers

Fort the year ended 2020, TPG reported total revenues of $2.11 billion, up 6% from the previous year. Net income increased to $1.44 billion from $1.18 billion in fiscal 2019. During the nine months ended September 2021, the company registered a 7-fold year-over-year increase in revenues to $3.9 billion. Over the past five years, total assets under management grew by 81%.

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The other top companies preparing to go public this year include food delivery service Instacart and social news aggregator Reddit.