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For the most part, the IPO market has been a bust this year. But there are some bright spots – such as energy deals.To this end, there was an interesting IPO filing this week: Brand Energy.
The company is a provider of multi-craft services for the downstream infrastructure space. Some of the offerings include: insulation, corrosion protection, weatherproofing, specialty coatings and so on. What's more, there are four major focuses: refining, Canadian Sands, petrochemical and power generations.
Brand Energy certainly has a sterling customer list, which includes biggies like BP (NYSE: BP), ExxonMobil (NYSE: XOM), Dow Chemical (NYSE: DOW) and Chevron (NYSE: CVX).
Essentially, a key advantage of Brand Energy is that the firm is a one-stop shop, which allows for more efficiency and speed. It also helps that there is a network of 202 service centers across North America.
No doubt, there are some big trends that should boost the long-term growth of Brand Power. For example, North America has an aging energy infrastructure (no refinery has been built since 1976); the quality of global crude feedstocks has fallen over the past 20 years (which leads to more corrosion and wear and tear); increasing regulations; and capital infusions in the Canadian Oil Sands.
In fact, it looks like the addressable market opportunity for Brand Power is about $25 billion. Moreover, the company generates pro forma revenues of about $1.4 billion (there are more than 175 long-term customer contracts and the average renewal rate is above 90%)
The lead underwriters on the IPO include Goldman, Sachs & Co. (NYSE: GS), UBS Investment Bank (NYSE: UBS) and Morgan Stanley (NYSE: MS). You can also locate the prospectus at the SEC's website.
Tom Taulli is the author of various books, including The Complete M&A Handbook
and The Edgar Online Guide to Decoding Financial Statements
. He also operates MergerBook.com.
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