IP Converge IPO (Cloud) price set at 4.2

IP Converge
Stock symbol: CLOUD

Number of shares listing : 181,866,669 common shares
Shares available to public: 25% of listed, or 45.47 million common shares
Price range: 4 to 8.80 per share.
Final price: 4.20
offer period: November 25 to December 2, 2010
Listing date: December 9, 2010.
Underwriters: BDO Capital & Investment Corporation is the issue manager and lead underwriter for the issue, and Unicapital Inc. is the co-lead underwriter and financial advisor.

Due to overall market performance now on choppy waters and IPO period was already set, CLOUD is forced to set their pricing at 4.20, or at the lower end.  This is at about 9.x p/e.  I don’t think this would be oversubscribed had they set it at 20x p/e, or their original hope or plan at the higher range of about 8.80 per share.

IP Converge is an IT Company engaged in offering Data Center facilities to clients who require colocation and disaster recovery services. Basically, clients rent for “data center spaces”, which could be coupled or bundled with connectivity and maintenance services. It’s like renting a condo unit, except that instead of a person, it is data who is renting for the space. IP Converge rents data center space inclusive of other amenities such as bandwidth connection and maintenance services (i.e. professional monitoring, troubleshooting, etc.).

IP Converge is also a reseller of several applications and software vendors such as Google, Salesforce.com, and Microsoft. However, Data Center and bandwidth services provided more than 60% of IP Converge’s revenues.

The offer proceeds will be used to fund IP-Converge’s data center and network expansion in Fort Bonifacio and Cebu City, the expansion of its Managed Services business segment and the Professional Services business segment, as well as minor acquisitions and general working capital requirements.

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