Neff, a lessor of industrial and construction equipment taken out of bankruptcy, filed on Wednesday with the SEC to raise up to $100 million in an initial public offering, although the deal size is likely just a placeholder. We estimate the company could raise $200 million or more.
Neff originally went public in May 1998 but was delisted from the NYSE in 2001. It was bought by Odyssey Investment Partners in 2005 for $510 million and filed for a $345 million IPO in May 2006 but later withdrew. It was then sold to Lightyear Capital for $900 million in 2007. Neff filed for bankruptcy in 2010 as US construction activity slowed during the financial crisis and the company was acquired by Wayzata Investment Partners (100% pre-IPO stake).
Revenue increased 13% to $170 million during the six months ended June 30, 2014, driven in equal parts by higher rental rates and a larger rental fleet. Its time utilization remained unchanged at 70%. Adjusted EBITDA rose 25% to $83 million as cost of goods sold and operating expenses fell as a percent of revenue.
Net income swung negative to a $17 million loss from +$13 million in the prior year period. This was caused by higher interest expense as a percent of revenue as well as a $24.5 million transaction bonus to management and board members related to its June refinancing. Neff more than doubled its debt to about $900 million (5.4x LTM adjusted EBITDA) last year after a $330 million distribution to Wayzata in June and a $110 million distribution in December.
The Miami, FL-based company, which was founded in 1988 and booked $347 million in sales for the 12 months ended June 30, 2014, plans to list under the symbol NEFF. Morgan Stanley, Jefferies, Piper Jaffray, BofA Merrill Lynch and Wells Fargo Securities are the joint bookrunners on the deal. No pricing terms were disclosed.
