West Corp., the phone-conferencing services provider owned by Thomas H. Lee Partners LP, fell in New York trading after raising $425.5 million in its initial public offering, pricing the shares below the marketed range.
The stock dropped 5.7 percent to $18.86 by the close today. The Omaha, Nebraska-based company priced 21.3 million shares, equivalent to a 26 percent stake, at $20 each, according to a statement yesterday. West earlier offered them for $22 to $25.
The IPO marks a return to the stock market for West, which counts AT&T Inc. as its largest customer. THL and Quadrangle Group LLC took West private for about $4 billion, including debt, in 2006. Founded in 1986 and listed on the Nasdaq at the time of the acquisition, West offers conference-call technology, call-center outsourcing, automated customer-call routing, and emergency-call services.
At the offering price, West’s market capitalization was about $1.67 billion, valuing its equity at about 21 percent more than THL and Quadrangle’s original $725.8 million investment, data compiled by Bloomberg show. Including a $350.6 million dividend the firms paid themselves in August, THL and Quadrangle would reap an overall gain of 69 percent.
The IPO will help West reduce debt and open the door for THL to begin selling the stock and returning cash to investors who financed the leveraged buyout.
Private-equity firms, many raising new funds, face increasing pressure to sell companies bought from 2005 to 2007, history’s largest buyout boom. THL may start marketing its proposed $4 billion fund this year, according to people familiar with the situation.
West planned to sell all of the stock in the offering, with THL’s stake shrinking to 44 percent after the sale from 58 percent, regulatory filings show. Quadrangle would own a 9.1 percent stake after the IPO, compared with 12 percent before the offering.
Goldman Sachs Group Inc. and Morgan Stanley led the IPO. West Corp. is listed on the Nasdaq Stock Market under the symbol WSTC.