LPL Financial, the largest independent broker-dealer, filed an amended Form S-1 with the SEC on Wednesday that assumed an IPO price of $28.50 per share for 17,176,195 shares of common stock, though it did not set a date for its much-anticipated IPO.
The $28.50 price is midway between the $30/share and $27/share range the company said in its filing that it expected at the time of its offering. At a $30/share price, the 17 million shares — which represent the publicly traded minority stake in the firm — would be valued at $515.28 million.
Private equity firms Hellman & Friedman LLC and TPG Group each own a 36% stake of LPL Financial. After the IPO, their respective stakes will shrink to about 31.5%, analysts point out, and the company should have some 107 million shares outstanding.
The company, led by Chairman Mark Casady (left), said it expected its stock to be listed on the Nasdaq Global Select Market with the ticker LPLA.
LPL executives were not available to comment, citing its quiet period.
"I'd assume they will price at the top of their range and be far oversubscribed," said Chip Roame, head of the financial-services consultancy Tiburon Strategic Advisors. "It's a great story about capturing the independent advisor wave."
The IPO gives LPL Financial funding for future growth, Roame says. It also allows the broker-dealer to acquire other firms now "on the cheap and then go 'further public' later at a higher market valuation. It's simple economics, and it's smart," he said in a phone interview on Thursday.
In the filing, LPL touted the growth in its representatives from "3,596 advisors in 2000 to 12,017 as of September 30, 2010, representing a CAGR of 13.2%," though the filing says that past growth "does not guarantee that we will attract advisors at comparable rates in the future."
Lead underwriters for the offering are Goldman, Sachs; Morgan Stanley; Bank of America/Merrill Lynch and JPMorgan Chase; the filing said the underwriters will be able to purchase up to an additional 1.56 million shares from LPL Investment Holdings Inc. and "one of our stockholders."
