So far this year, it's been a tough IPO market. However, there were no problems for the offering of Intrepid Potash (NYSE: IPI), which sold 30 million shares at $32 a piece. In today's trading, the shares are up an impressive 56%.
Intrepid Potash is the largest producer of muriate of potash in the U.S. It operates production facilities, three in Mexico and two in Utah.
According to Fertecon Limited, the global potash market is expected to grow 3.5% per year from 2007 to 2011. Simply put, there is strong demand from China, India and other emerging economies. In fact, as personal incomes grow, there tends to be an increase in consumption of animal protein, which requires significant amounts of grain for feed.
As for Intrepid Potash, the firm is ramping up nicely. Last year, revenues spiked 40% to $213 million and earnings came to $29.7 million.
What's more, the rest of the potash market has been red hot. Just look at the strong stock performances of Potash Corp. of Saskatchewan, Inc. (NYSE: POT) and CF Industries Holdings, Inc. (NYSE: CF).
If you want to learn more about the Intrepid Potash offering, you can find the prospectus at the SEC website.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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