LPL Investment Holdings Inc. is setting a maximum price of $30 per share on its initial public offering. At that price, executives and other LPL shareholders stand to make a bundle off the public float, which market watchers believe could come any day now.
In a filing Wednesday afternoon with the Securities and Exchange Commission, LPL, the largest and most closely watched independent contractor broker-dealer in the industry, said its could offer 17,176,195 shares, without setting a date.
At the proposed maximum price of $30, LPL Investment Holdings would have a potential market capitalization of $515 million. There would be 107.1 million shares outstanding after the sale.
The filing was a preliminary prospectus, the company said, and could be changed. “It is currently estimated that the initial public offering price per share will be between $27.00 and $30.00,” the filing said.
LPL is owned by private-equity firms Hellman & Friedman LLC and
TPG Group. According to the preliminary prospectus, those two firms each control about 36.3% of the common stock at the moment. They will retain the vast majority of their shares after the
IPO, according to the prospectus, Each will own between 31.5% to 31.9% of the firm, depending on whether the underwriters of the deal exercise their stock options in full.
(Click here to see how LPL's financials stack up against other large independent broker-dealers.)
Most of the shares being offered currently belong to executives, board members, underwriters or reps and advisers.
With a stock price of $30 per share, several LPL executives would see windfalls of tens of millions of dollars. Mark Casady, chairman and CEO, for one, currently owns four percent of the firm, or 3.930,000 shares.
According to the filing, he is slated to sell 1,930,000 shares. If those shares are purchased at $30 per share, Mr. Casady will gain nearly $58 million.
Esther Stearns, the firm's president and chief operating officer, controls 2,050,000 shares. She intends to offer 1,170,000 shares, which will net her $35.1 million in cash if the IPO prices at $30 a share.
Meanwhile, William Dwyer, the firm's president of national sales and marketing, controls 1,780,000 shares, or 1.9% of the firm. He intends to sell 275,000, for a potential gain of $8.25 million.
(Hundreds of individuals also currently hold smaller stakes in LPL. See a list of more than 900 individuals with a less than 1% stake in the company here.)
Wall Street titan
Goldman Sachs & Co. also stands to make some cash off the deal. Not only is Goldman co-lead manager on the IPO, the Wall Street giant is selling 1,931,541 of the nearly three million LPL shares it holds. If the offering comes in at the top end of the price range, Goldman should rake in about $58 million for the shares.
(Click here for a chart of 25 of the largest holders of LPL stock -- and how much some could earn off of sales of their stakes following the public offering.
With more than 12,000 reps in its network, LPL is one of the largest brokerage firms in the country.
(View LPL's full company profile. Also, see how advisers
recently ranked LPL in a recent satisfaction survey.)
LPL becoming a public company has been widely considered as a seminal event for the independent contractor broker-dealer industry. Long overlooked and misunderstood by the investment community, executives at independent contractor broker-dealers see LPL's public listing as a validation of the way their firms do business.
The anticipation for LPL's IPO has been building since June, when the firm filed for its initial registration of the public offering.
LPL Investment Holdings Inc. intends to list the common stock on the
NASDAQ Global Select Market under the symbol “LPLA.” The lead underwriters of the offering include the top Wall Street banks: Goldman Sachs & Co.; Morgan Stanley; BofA Merrill Lynch; and J.P. Morgan.
