Matthew R. Crow, ASA, CFA, president of Mercer Capital, was quoted in the article “Focus Financial IPO is on at $39 per share as KKR pushes giant share premium, with an eye on raking off an extra $532 million” (RIABiz).
Focus Financial expects to price its IPO between $35 and $39 per share, which was nearly double the price they announced in late May. According to the article, it’s rumored that a private equity backer pushed to complete the IPO by the end of July at a higher price than originally indicated.
Matt commented, “KKR’s demand for a sky-high share price is a high-risk, high reward play.” He continues, “If they go public at $39, and it drops to $22, it’ll be much harder for RIAs to accept Focus shares [as currency] — even if it should have been $22 to begin with.”
Mercer Capital’s Asset Management practice provides RIAs, trust companies, and investment consultants with corporate valuation, financial reporting valuation, transaction advisory, portfolio valuation, and related services. Our industry blog, RIA Valuation Insights, is updated weekly with commentary on issues important to the Asset Management industry. We will continue to follow the future developments related to Focus Financial’s IPO.