CBOE Holdings has been highlighted as Renaissance Capital's Featured IPO.
The long-anticipated IPO by the Chicago Board Options Exchange, the US's largest options exchange by volume, is set to debut this week, one of six deals on the IPO calendar. After being owned by its member firms since 1973, CBOE transitioned to a for-profit model in 2006 and now looks to transfer to public ownership. CBOE offers options on 10 indexes, over 2,400 equities and over 250 ETFs, with most of its revenue coming from transaction fees generated by volume in these products. Its most heavily traded products are options on the S&P and DJIA indexes as well as the VIX, the volatility index measured by the CBOE itself.
CBOE is likely to appeal to investors because of its scalable business model and high barriers to entry, which support strong margins. It has several key growth drivers and investors may also consider it an acquisition candidate. The company plans to sell 11.7 million shares (18% coming from existing shareholders) at a price between $27 and $29; the proceeds of the offering will be used to repurchase existing shares in a tender offer. Goldman Sachs is the bookrunner on the deal, which is expected to price Monday evening and list on the NASDAQ under the symbol "CBOE."
Read our full IPO Commentary.
