DALLAS-Holliday Fenoglio Fowler LP has filed an SEC registration to go public. The filing calls for a $100-million liftoff with a class A common stock sale on the NYSE under the symbol "HF."
John H. Pelusi Jr., HFF's operating committee chief, and local top exec Mark Gibson couldn't be reached for immediate comment, but details undoubtedly will be filtering out soon about its plan to join the publicly traded arena. Goldman Sachs & Co. and Morgan Stanley & Co. Inc. are listed as underwriters. The IPO date is blank on yesterday's filing.
According to the SEC prospectus, HFF has 18 offices with more than 130 transaction professionals and 270 support associates. Its revenues totaled $205.8 million in 2005 and net income rang in at $46.8 million versus 2004's $143.7 million and $28.1 million, respectively. To date this year, the HFF team has logged $156.5 million in revenue and $31.7 million in net income. "We believe our business mix, operational expertise and leveragability of our platform have enabled us to achieve profit margins that are among the highest of our public company peers," according to the prospectus.
Prior to the offering's closing, the plan is to reorganize HFF Inc., which was formed this month as a holding company with partnership units in the operating partnership and for all outstanding shares of Holliday GP, the sole general partner of the operating partnership. HFF Inc.'s wholly owned subsidiaries, via direct and indirect ownership, will be HoldCo LLC and Holliday GP. The filing triggers a 180-day lock-up period for HFF Holdings with regard to the proposed sale.
In March, HFF LP secured a $60-million, senior secured term loan facility and $20-million senior secured revolver from Bank of America. As of September, it had borrowed $57.5 million at a weighted average rate of 7.75% interest, based on a rate of 250 basis points over Libor. The facilities mature March 29, 2010. In the SEC filing, HFF execs report the proceeds were used for distribution payments to members of HFF Holdings.
According to the prospectus, HFF's operating expenses is its largest component. As of Sept. 30, this year's operating expenses totaled about $123.3 million. In 2005, operating expenses were $159.3 million.
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