A big Douglas County provider of engineering and energy data indefinitely postponed its initial public stock offering Wednesday, citing “very weak market conditions” and the inability to get a “comfortable” share price.
IHS Inc. is the second large U.S. company in two weeks to cancel its first stock sale. Boise Cascade, maker of wood and paper products, last week nixed its $400 million offering in the wake of other IPOs trading below expectations.
“IHS has a very strong balance sheet,” said Jane Okun, the company’s senior vice president of investor relations. “We are sitting on a great deal of value and didn’t want to sell the company for less.”
Investors are skittish, and there is little stability in the market, Okun said. IHS, a provider of standards and regulation data to energy, automotive and aerospace businesses, planned to float more than 15 million shares of Class A common stock at a price between $14.50 and $16.50 a share. A vast majority of recent IPOs have priced below the bottom of their anticipated ranges, Okun said, referring to Warner Music Group and Lazard, an investment bank.
“The public markets are being more selective about which companies they view as appropriate IPO candidates,” said James Linfield, managing partner of the Broomfield office of Cooley Godward, a Silicon Valley-based law firm. “However, for companies with a solid business and a strong management team, an IPO is still a very viable financing alternative.”
IHS posted earnings of $13.1 million for the first quarter of this year. The company had $395 million in sales in 2004, and it has little debt.
“We have time to wait for better market conditions,” Okun said.
IHS has 700 employees in Colorado among more than 2,400 employees worldwide. It was founded in Denver in 1959, and it is privately held by TBG Holdings, based in Europe.
Okun said the company is “very focused” on going public but will wait until conditions improve.
“We’re going to watch the market, and we expect to come back,” she said. “We want it to happen sooner than later.”
Staff writer Kimberly S. Johnson can be reached at 303-820-1088 or kjohnson@denverpost.com.
