Medley Management, a alternative asset manager with $3.3 billion of AUM, announced terms for its IPO on Thursday. The New York, NY-based company plans to raise $126 million by offering 6.0 million Class A shares at $21, the midpoint of its range. At that price, Medley would command a fully diluted market value of $642 million.
The company launched Medley Capital (NYSE: MCC), its first permanent capital vehicle, in 2011 as a business development company. It also manages Sierra Income Corporation (SIC), which is offered on a continuous basis to investors over 110 broker dealers representing 27,800 RIAs. At the end of June, it had $3.3 billion of AUM (74% fee-earning), up from $2.0 billion (86%) one year ago.
The company is controlled by twin brothers and Co-CEOs/Co-Chairmans Brook and Seth Taube. The Class A shares offered in the IPO will have 2.5% voting rights and 100% economic rights, while the Taube brothers will retain a 97.5% voting power through Class B shares. After one year, management's 23.3 million LLC units can be converted into Class A shares, giving the brothers a combined 68% economic stake in the company and President Jeffrey Tonkel a 6% stake. The company made distributions to pre-IPO owners of $19 million in 2012, $42 million in 2013 and anticipates $121 million during 2014.
Total revenue nearly doubled to $33 million for the six months ended June 30, 2014, driven by higher management fees related to increases in AUM for MCC and SIC. Medley also saw higher AUM in its separately managed accounts, which led to an increase in management fees and performance fees. Core EBITDA increased 130% to $21 million. The company will have post-IPO debt of $104 million due to a loan related to its distribution.
Medley Management, which was founded in 2006 and booked $60 million in total revenue for the 12 months ended June 30, 2014, plans to list on the NYSE under the symbol MDLY. Goldman Sachs and Credit Suisse are the joint bookrunners on the deal. It is expected to price during the week of September 22, 2014.
Renaissance Capital will issue a Pre-IPO research report on Medley before its IPO.
