Intelsat SA (I), the world’s largest satellite services business, climbed on its first day of trading after raising $347.8 million in a U.S. initial public offering, less than it sought.
The shares rose almost 7 percent to $19.25 at the close in New York, after reversing earlier losses. Intelsat sold 19.3 million shares for $18 each, equal to about a 19 percent stake. The company had offered 21.7 million shares for at least $21. At the IPO price, Luxembourg-based Intelsat would have a market value of $1.85 billion.
A group of private-equity funds led by BC Partners Ltd. and Silver Lake Management LLC acquired Intelsat in a 2008 buyout that valued the satellite operator’s equity at about $5 billion. That transaction was partly financed with debt, Chief Financial Officer Michael McDonnell said in a phone interview today. Neither firm planned to offer shares in the IPO, filings show. Intelsat will use proceeds from the offering to repay debt.
The fact that Intelsat’s private-equity owners didn’t sell shares in the IPO was “encouraging for incoming investors,” said Giles Thorne, an analyst at Jefferies LLC in London, in a telephone interview today.
Intelsat was established in 1964 as the first commercial satellite-services provider, according to its website. Its European competitors include Paris-based Eutelsat Communications SA (ETL), London-based Inmarsat Plc (ISAT), and SES SA, the world’s largest publicly traded satellite operator, also based in Luxembourg.
The stock is listed on the New York Stock Exchange under the symbol I. Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley and Bank of America Corp. led the offering. The company, led by Chief Executive Officer David McGlade, filed to raise $1.75 billion last May, then reduced that amount in March.
Intelsat generated $2.61 billion in revenue in 2012, a less than 1 percent gain from the year-earlier period. Intelsat’s communications network includes more than 50 satellites that cover more than 99 percent of the world’s populated areas, the filings show.
To contact the reporter on this story: Kristen Schweizer in London at firstname.lastname@example.org