Principal Makes $1.85-Billion Splash With IPO
Investors opened their wallets Monday for the first billion-dollar initial public stock offering since July, as insurance firm Principal Financial Group priced its new shares.
The Des Moines-based company sold 100 million shares at $18.50 each, raising $1.85 billion.
It’s the first billion-dollar IPO since July 19, when consulting firm Accenture raised $1.67 billion.
The IPO market all but dried up in the aftermath of the Sept. 11 terrorist attacks. Only two other IPOs have been sold in October. Another offering that was scheduled for last week--a deal from medical services provider Universal Hospital Services--was postponed by underwriters.
The Principal offering is another in a long line of insurance company IPOs, as firms formerly owned by policyholders go public.
Principal’s IPO represents a 28% stake in the company. The firm didn’t get the price it wanted Monday: It initially hoped to get as much as $20.50 a share, but that was reduced in recent days.
Principal shares are expected to begin trading today on the New York Stock Exchange under the symbol PFG.
Meanwhile Monday, Carlyle Group Inc. filed to sell the public a stake in its United Defense Industries Inc., which designs and produces combat vehicles and artillery for the U.S. and allied governments.
Arlington, Va.-based United Defense anticipates the IPO will raise as much as $300 million.
Carlyle, an investment firm whose advisers include former President Bush, formed the contractor in 1997 and will sell an undetermined percentage of its holdings, according to a filing with the Securities and Exchange Commission.
United Defense expects to benefit from increased military spending as the U.S. and its allies wage war on terrorism. The contractor’s products include naval guns, missile launchers and precision munitions.
The company landed a $665-million contract in September to complete the development phase of the U.S. Army’s “Crusader.” The Crusader is made up of two vehicles: a self-propelled Howitzer gun, or short cannon, and an armored supply vehicle.
United Defense recorded a $1.7-million loss on $914 million in revenue during the first nine months of this year.
