US IPOs: Which young companies are looking to become publicly traded
For most entrepreneurs with young businesses and high hopes, “going public” is always on the back burner, yet one of the greatest achievements a business can endure. Investors, too, are constantly on the prowl for promising businesses approaching the market for the highest bidder. Here are some businesses who are issuing common stock and shares to the public this quarter.
Toys ‘R Us
While there was chatter that the toy giant Toys ‘R Us would go public in 2010, the retailer will most likely go public in 2011 because of the slow economic recovery and the large probability that the company won’t be able to get top dollar for what it’s worth. The company, which went private in 2005, plans to return to the public markets and hopes to raise $800 million and would make for the largest retail IPO since discounter Dollar General Corp. raised $824 million in its sale last November. Proceeds from the IPO will be used to pay down their more than $5 billion debt and for other general purposes.
San Diego, Calif.-based Zogenix, Inc. is a biopharmaceutical company focused on developing and commercializing central nervous system and therapeutic pain medications. The company filed to go public in 2010 through a $90 million IPO.
Anacor Pharmaceuticals, Inc.
Palo Alto, Calif.-based Anacor Pharmaceuticals, Inc. focuses on curing skin conditions and ailments and is developing drug compounds for use as topical treatments of bacterial, fungal and inflammatory conditions.
Wave2Wave Communications, Inc.
Hackensack, New Jersey-based Wave2Wave Communications Inc. builds and manages wired and wireless broadband systems for businesses to enable data, telephone and email services. The company also specializes in enterprise voice and data systems, audio and web conferencing, remote network access, and secure data networks, as well as the installation of fixed wireless broadband systems.
LPL Investment Holding Inc.
Boston, Mass.-based LPL Investment is the holding company for LPL Financial, one of the largest brokerage firms in the nation and offers technology, infrastructure, training and research, along with stocks, bonds, mutual funds, and other investment products to approximately 12,000 independent financial advisors across the U.S.
Richmond Honan Medical Properties, Inc.
Atlanta, Georgia-based Richmond Honan Medical Properties, Inc. is a self-managed real estate company that acquires, develops and manages medical office buildings for physicians and specialty clinics. The company filed to go public in 2010 and upon the closing of its offering, will plan to own interests in 30 U.S. medical office properties in 10 different states, with more than 1.5 million leasable sq. ft.
Booz Allen Hamilton Holding Corporation
McLean, Virginia-based Booz Allen Hamilton Holding Corporation has been helping U.S. government agencies operate more efficiently for nearly a century. The firm provides a wide range of management consulting and technology integration services and specializes in IT, operations, program management, training programs, and systems engineering. Investment firm, The Carlyle Group, owns a majority of the interest of the company.
NEW IPOS ON THE BLOCK
Durham, North Carolina-based Tranzyme Pharm is one of the newest companies to hit the IPO train and develops drugs that treat gastrointestinal motility disorders, which are conditions that disrupt the normal movement of food through the GI tract. The company filed for an IPO in November to raise $75 million.
FXCM, Inc. is an online provider of foreign-exchange currency trading and began public trading in November in an IPO that could raise more than $200 million. The company is offering nearly 15.1 million common shares, priced between $13 and $15 a piece. FXCM Inc. says it intends to use a portion of the offering proceeds to buy stakes in the company from its existing owners, including senior managers.
Casino company, Harrah’s Entertainment Inc. folded on a planned $500 million IPO back in November when they got cold feet for the fear of difficult marketing conditions. The IPO was scheduled to sell 31.3 million shares at upwards of $15 to $17 per share. Funds generated would have generated been filtered into new casino developments and paid off a portion of its $20 billion debt. Harrah’s had more debt relative to cash flow than any private equity-backed company that sold shares last year, except for one company.
Many industry experts have said that Harrah’s withdrawal from the IPO suggests that investors are still wary about taking on private-equity IPOs of portfolio companies that are highly leveraged or whose outlook is too dependent on the health of the economy. Bigger companies, like Harrah’s Entertainment and Toys ‘R Us, need to confirm that they can still boost their revenue and profits, even though the current economy is unstable.
Six issues at the top of tax and finance leaders’ agenda
New Deloitte research reveals that tax leaders are under increasing pressure to add strategic value as companies accelerate business model transformation, from undergoing digital transformations to rethinking their supply chains or investing in green initiatives.
According to Phil Mills, Deloitte Global Tax & Legal Leader, to “truly deliver value to the business, the tax function needs to rethink its resourcing model and transform its technology infrastructure to create capacity and control costs”.
And the good news, according to Mills, is that tax and business leaders have more options at their disposal to achieve this.
Reflecting the insights of global tax and finance executives at global companies, Deloitte’s Tax Operations in Focus study reveals the six issues at the top of tax and finance leaders’ agenda.
Trend 1: Businesses seek more strategic counsel from tax
Companies are being pushed to develop new digital products and distribution channels and accelerate sustainable transformation and this is taking them into uncharted tax territory. Tax leaders say their teams must have the resources and skills to give deeper advisory support on digital business models (65%), supply chain restructuring (49%) and sustainability (48%) over the next two years. This means redrawing the boundaries of what tax professionals focus on, and accelerating adoption of advanced technologies and lower-cost resourcing models to meet compliance requirements and free up time.
According to Joanne Walker, Group Tax Director, BT Group PLC, "There’s still a heavy compliance load today, but the vision for the future would be that much of that falls away, and tax people become subject matter experts who help program the machine, ensure quality control, and redirect their time to advisory activity.”
Trend 2: Tipping point for resourcing models
Business partnering demands in the tax department are on the rise, but 93% of tax leaders say their department’s budget is remaining flat or falling. To ensure that the tax function can redefine itself as a strategic function at the pace that is required, leaders are choosing to move increasing amounts of compliance and reporting to a combination of shared service centers, finance departments, and outsourcing providers that have invested in best-in-class technology.
Trend 3: Digital tax administration is moving faster than expected
in addition to the rising focus of the corporate tax department partnering with their business counterparts, transformative changes to the way companies share tax information with revenue authorities is also creating an imperative to modernize operations at a faster pace. Nine in 10 (92%) respondents say that shifting revenue authority demands on digital tax administration will have a moderate or high impact on tax operations and resources over the next five years—and several heads of tax said the trend is moving faster than expected.
"It’s really stepped up in the last couple of years," says Anna Elphick, VP Tax, Unilever. "Tax authorities don't just want a faster turnaround for compliance but access into a company’s systems. It's not unreasonable to think that in a much shorter time than we expect, compliance will be about companies reviewing a return that's been drafted by the tax authorities."
Trend 4: Data simplification and lower-cost resourcing are top priorities
Tax leaders said that simplifying data management (53%) and moving to lower-cost resourcing models (51%) must be prioritized if tax is to become more proactive at delivering strategic insights to the business. Many tax teams are ensuring that they have a seat at the table as ERP systems are overhauled, which is paying dividends: 56% of those that have introduced NextGen ERP systems are now highly effective at supporting the business with scenario-modeling insights. Only 35% of those with moderate to low use of NextGen ERP systems said the same.
At Stryker, “we automated the source P&L process for transfer pricing which took a huge burden off of the divisions," says David Furgason, Vice President Tax. "Then we created a transfer price database to deposit and retrieve data so we have limited impact on the divisions. We are moving to a single ERP platform which will help us make take the next step with robotics.”
Trend 5: Skillsets are shifting
Embedding a new data infrastructure and redesigning processes are critical for the future tax vision. Tax leaders are aligned — data skills (45%) and technology process experience (43%) are ‘must have’ skills in a tax department of the future, but more traditional tax specialist knowledge also remains key (40%). The trick to success will be in tax leaders facilitating the way these professionals, with their different backgrounds, can work together collectively to unlock lasting value.
Take Infineon Technologies, which formed a VAT technology and governance group "that has the right knowledge about how to change the system to ensure it generates the right reports", according to Matthias Schubert, Global Head of Tax. "Involving them early was key as we took a greenfield approach, so we could think about what the optimal processes would look like and how more intelligent systems could make an impact
Trend 6: 2020 brought productivity improvements
Improved productivity (50%) and accelerating shifts to remote working (48%) were cited as the biggest operational benefits to emerge from COVID-19-driven disruption. But, as 78% of leaders now plan to embed either hybrid or fully remote models in the tax function long term, 34% say maintaining productivity benefits is a top concern. And, as leaders think about building their talent pipeline and strengthening advisory skill sets, 47% say they must prioritize new approaches to talent recognition and career development over the next two years, while 36% say new processes for involving tax in business strategy decisions must be established.