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[January 15, 2013]
Austin-based USA Compression Partners debuts its IPO; shares trading lower [Austin American-Statesman]
(Austin American-Statesman (TX) Via Acquire Media NewsEdge) Jan. 15--Austin-based USA Compression Partners has now made it through the IPO gate, but the company's shares closed below their offer price in the first day of trading.
The company raised $198 million in an initial public offering on Monday night by selling 11 million shares at $18 each to institutional investors.
Shares of the natural gas compression service provider closed down 2.27 percent at $17.60 on the New York Stock Exchange on Tuesday.
Last week, the company said it planned to price 10 million shares at between $19 and $21 a share in an offer that would have raised $200 million.
"They raised what they were looking for, but it's a disappointment to see your stock trade down," said John Fitzgibbon, of IPOScoop.com, which tracks initial public offerings.
Fitzgibbon said the company's decision to add an additional 1 million shares could have weakened demand for shares once they began trading.
"That was probably a stumbling block," he said. "What you've done is taken a lot of after-market orders off the table. It's supply and demand." Founded in 1998, USA Compression Partners is one of the largest natural gas compression service providers in the nation. It leases systems that compress natural gas to create the pressure needed for production and transportation. Its equipment is used in key natural-gas production areas, including the Eagle Ford and Barnett shale-gas plays in Texas.
USA Compression is owned by Riverstone Holdings, a New York-based private equity firm that bought 97 percent of the company in 2010.
For the nine months ending Sept. 30, the company had revenue of $87 million and net income of about $3.6 million. As of Sept. 30, the company had 227 employees, according to a securities filing.
The company has said it plans to use the IPO proceeds to pay down debt.
The company's offering wasn't just the first IPO for Austin this year; it was the first in the nation, according to ..... Last year, Austin had two IPOs -- software maker Bazaarvoice raised $114 million in February and Tex-Mex restaurant chain Chuy's raised $75.8 million in July.
Currently, no other Austin company has filed plans for an IPO.
Underwriters on the USA Compression deal include Barclays Capital Inc., Goldman Sachs & Co., J.P. Morgan Securities and Wells Fargo Securities.
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