Aventine Renewable IPO heats up

June 29, 2006

By Steve Gelsi, MarketWatch

The company raised $389.5 million by offering 9.06 million shares with lead underwriter Banc of America (BAC). The size of the IPO was increased by a million shares from its earlier level of about 8 million shares.

Aventine marks the second of three ethanol makers on deck this summer after Verasun Energy (VSE) priced at $23 a share on June 14. Shares of Verasun closed at $27.18 on Wednesday.

Hawkeye Holdings is still to come. Although Aventine is a newcomer to the stock market, it features some familiar names as shareholders.

Metalmark, a private-equity firm established by former principals at Morgan Stanley Capital Partners (MS) , owns a big stake in the company.

CEO Ronald H. Miller, 57, has been with the company since 1981, serving in a number of positions before moving up to his current title in 2003. In the three months ended March 31, Aventine said that net income doubled to $12.2 million on revenue of $314 million, compared with net income of $6.6 million on revenue of $197 million in the year-ago period. Interest in ethanol has been high, given that it’s seen as an alternative to crude oil.

Archer Daniels Midland Co. (ADM) is the largest ethanol producer in the U.S. with annual production of 1 billion gallons.

While tough market conditions are forcing come IPOs into discounting or pulling their deals entirely, the right offerings are catching strong interest.

J. Crew (JCG) rallied nearly 30% in its first day Wednesday, even after pricing above its estimated range. See full story.

Steve Gelsi is a reporter for MarketWatch in New York.

Source:  Market Watch 

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