Bridgepoint Education Inc. (BPI), a provider of post-secondary education services, announced Wednesday the pricing of its initial public offering of 13.50 million shares of its common stock at $10.50 per share, below the expected price range of $14 to $16 per share. The offering includes 3.50 million shares offered by the company and 10 million shares offered by its selling stockholders.
The company founded in 2004 and headquartered at San Diego, California said its common stock will commence trading on the New York Stock Exchange on April 15, 2009, under the ticker symbol "BPI." In addition, Warburg Pincus Private Equity VIII, L.P., which owns 68.5% of Bridgepoint shares, has granted the underwriters a 30-day option to buy up to 2.03 million common shares at the IPO price to cover over-allotments, if any.
Credit Suisse Securities (USA) LLC and J.P. Morgan Securities Inc. acted as joint book-running managers of the offering. William Blair & Company, L.L.C., BMO Capital Markets Corp., Piper Jaffray & Co., and Signal HillCapital Group, LLC, acted as co-managers for the IPO.
On the first of this month, Bridgepoint had revealed, in a regulatory filing, its intention to issue 13.5 million shares through an IPO, but had expected to price the offer at $14.00-$16.00 per share. The company had also said that it is selling 2.615 million shares of its common stock and the selling stockholders are selling 10.885 million shares of common stock.
At that time, the company had estimated to raise net proceeds of $30.6 million from the offering, assuming an IPO price of $15.00 per share. Also, the company said that the holders of its Series A Convertible Preferred Stock can optionally convert their shares into shares of common stock immediately prior to the closing of this offering.
Upon such conversion, in addition to receiving shares of common stock, the holders would be entitled to receive the accreted value of $27.6 million of the Series A Convertible Preferred Stock. This would be paid out of the net proceeds from the offering, the company had confirmed, and had added that he balance of net proceeds was intended to be used for general corporate purposes.
Bridgepoint, founded and led by Andrew Clark, owns and operates two regionally accredited universities, Ashford University and University of the Rockies. Clinton, Iowa-based Ashford was founded in 1918 and subsequently acquired by the company. Likewise, Colorado Springs, Colorado-based Rockies was founded on June 18, 1998 as the Colorado School of Professional Psychology, or COSPP.
The company is on a high-growth plane. For the year ended December 31, 2008, the company reported net income available to common stockholders of $24.43 million or $0.13 per share, whereas in 2007, it was just $1.43 million or $0.01 per share. Revenue for 2008 jumped to $218.29 million from $85.71 million in the previous year.
According to a Renaissance Capital LLC report, published on its Web site, the ongoing market volatility has led to a near-frozen IPO market. In 2008, a total of 43 companies went public in the U.S., with only 8 IPOs in the second half. IPO issuance in the U.S. remained extremely low in the first quarter of 2009, the report added.
So far only 2 IPOs have been listed on the U.S. exchanges, Mead Johnson Nutrition Company (MJN) and Changyou.com Limited (CYOU). Another offering on the pipeline is that of Rosetta Stone (RST), besides that of Brigdepoint. Rosetta plans to offer 6.25 million shares at a price of $15-$17 per share, with the stock starting to trade on NYSE on April 16 under the symbol "RST."
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