GlassHouse Technologies is the latest in a long string of companies withdrawing IPOs. The IT consulting firm had been in registration for 15 months before finally pulling the plug, citing “market conditions.” The company has raised $64 million through six funding rounds (presumably a seventh is on the horizon). $30 million of that is already gone: the company did four acquisitions last year.
A quick search on IDEA (some day someone will have to explain to me what was wrong with Edgar or what the difference is with this new system) turns up 111 Forms RW filed since January 1.
Other notable recent withdrawals include Del Frisco’s Restaurants (much to the chagrin of Allen & Overy attorneys, who sit upstairs in the McGraw-Hill Building where the Manhattan restaurant is located), Pogo Jet (an on-demand jet-charter service that had no revenues in the six years between founding and filing in December 2007), and Vitamin Shoppe (the ubiquitous supplement vendor, which had revenues of almost $500 million in 2007).
Only Mead Johnson Nutrition‘s $720 million offering on February 12 has actually priced this year. Given current market conditions, it seems to be a success so far. The deal priced at $24, the high end of the range, and is up about 10% since. Susan Webster (Wesleyan BA ’77, NYU MS ’78, Fordham JD ’84) of Cravath represented the company. Richard Truesdell (Penn ’83, Columbia JD ’86) of Davis Polk was underwriters’ counsel for Citi and Morgan Stanley.
The only viable contender appears to be Madison Square Capital, a REIT that plans to buy mortgage debt with the $300 million it hopes to raise. Unfortunately, the company is facing two significant risks: the market simply isn’t offering prices that companies find attractive, and no one has any idea what is going to happen in the mortgage market. David Wright (Virginia BA ’78, Virginia JD ’81) of Hunton & Williams is issuer’s counsel. Howard Adler (Johns Hopkins BA ’72, NYU JD ’75) of Gibson Dunn represented the underwriter Friedman, Billings, Ramsey & Co.
How does it look from the legal side? Are clients filing now in the hope that the market will be turned around by the time the registrations are ready to go?