IPO Report: Private-equity firm TPG finally goes public in $1 billion deal and delivers a solid opening day gain

TPG Inc. rose handily in its initial public offering on the Nasdaq on Thursday, some 30 years after the private-equity firm launched under the name Texas Pacific Group.

TPG TPG, +14.97% opened at $33, about 11.9% above its $29.50 IPO price, and rose to $33.78 in early afternoon trades for a gain of about 14.5%.

At its opening price of $33, TPG had a market cap of $10.1 billion, based on the 69 million Class A shares expected to be outstanding and the 229.7 million Class B shares, according to the company’s prospectus..

The company went public on a rather downbeat day for recently-IPO’d stocks, as the Renaissance IPO ETF IPO, -3.32% dropped 3.7% while the S&P 500  SPX, -0.74%  slipped 0.9%.

The long-anticipated deal comes from an investment manager with assets under management of $109 billion, 912 employees, and more than 280 active portfolio companies.

A total of 33.9 million shares were offered for $1.0 billion in the IPO, as TPG TPG, +14.97% sold 28.3 million shares to raise about $835.15 million and an existing strategic investor — China Life Trustees Limited — sold 5.6 million shares to raise $164.90 million.

The IPO comes after a strong year for other publicly traded private-equity firms such as Blackstone BX, -2.21%, Apollo Global Management Inc. APO, -1.54%, KKR& Co. Inc. KKR, -1.91% and Carlyle Group CG, -0.19%.

Although active since in the San Francisco area in its earliest years, TPG traces its roots to Texas, with its current headquarters in Fort Worth.

The firm was founded in 1992 by David Bonderman, James Coulter and William S. Price III. Bonderman and Coulter previously ran a buyouts business for billionaire Robert Bass in the 1980s.

TPG’s first major deal was buying Continental Airlines out of bankruptcy. Over the years, TPG changed its brand from its earlier name, Texas Pacific Group, and backed many high profile companies that have gone public from Airbnb ABNB, -0.55% to Spotify Technology SA SPOT, -0.64%.

The firm has also taken companies public through special-purpose acquisition company deals. One recent example was TPG Pace Solutions, which took travel site Vacasa Inc. VCSA, -0.13% public.

TPG is going public about 15 to 20 years after many of its peers.

“They may have felt at a competitive disadvantage to public peers by not having a liquid currency of shares with which to pay executives, or to make acquisitions,” said one longtime private-equity executive.

Tomi Kilgore contributed to this report.

Also Read: The TPG IPO: 5 things to know about private-equity firm valued at $9 billion

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