Realogy Raises $1.08 Billion, Pricing IPO at Top End of Range

Realogy Holdings Corp., the real estate brokerage company that’s controlled by Apollo Global Management LLC, raised $1.08 billion in an initial public offering, pricing the shares at the top of the proposed range.

Realogy, which owns brokerage brands such as Coldwell Banker and Century 21, sold 40 million shares for $27 each, according to a statement yesterday, after offering them for $23 to $27 apiece, representing a 31 percent stake. The shares will be listed on the New York Stock Exchange under the symbol RLGY.

Apollo, which was set to maintain a 50.2 percent stake in Realogy after the IPO, sought to take the company public almost six years after buying it as U.S. home prices headed for their worst collapse since the 1930s. Parsippany, New Jersey-based Realogy planned to use proceeds from the sale to help reduce debt by more than a third, to $4.5 billion, regulatory filings show.

The IPO also came as Leon Black’s Apollo prepares to raise a new fund of $10 billion to $12 billion, people familiar with the situation said in August. Berry Plastics Group Inc., also owned by Apollo, completed an IPO last week, pricing the shares at the low end of the marketed range and since declining in public trading. Apollo-owned companies CKE Inc. and Momentive Performance Materials Holdings LLC shelved offerings this year.

Apollo’s Stake

Apollo invested $1.05 billion in Realogy in the buyout, which was valued at $6.8 billion and completed in 2007, according to data compiled by Bloomberg. The firm announced the acquisition in December 2006, five months after home prices peaked, according to the S&P/Case-Shiller index.

At the midpoint of the IPO price range, Apollo’s stake would be valued at $1.63 billion. Paulson & Co., the hedge fund run by John Paulson, was set to own a 10 percent stake in the company following the IPO, filings show.

After the IPO and related transactions that convert debt to equity, the midpoint price would give Realogy net debt of $4.5 billion as of June 30. It would have an enterprise value of $7.77 billion, or about 16 times earnings before interest, taxes, depreciation and amortization of $500 million in the 12 months through June 30.

Goldman Sachs Group Inc. and JPMorgan Chase & Co. were hired to manage Realogy’s IPO.

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