BrightView takes next step in public filing, reveals prices for shares

BrightView—which once again ranked No. 1 on the LM150 list of the industry’s top 150 revenue-generating firms—announced the launch of its initial public offering of 21,300,000 shares of its common stock. According to a report on StreetInsider, the initial public offering price is expected to be between $22 and $25 per share.

“It’s a fabulous valuation for our industry,” said Greg Herring, CEO of Herring Group, a financial consulting firm.

He added, “It’s about two times what other landscape companies are being sold for in private industry transactions. Most companies in the landscape industry sell for 5 or 6 times their earnings before interest, taxes, depreciation and amortization (EBITDA). BrightView at this stock price will be selling at 12 times its EBITDA. Since it’s double, that raises the valuation on other companies that may be wanting to sell.”

At $23.50 per share, the average existing BrightView investor will double their money, as the existing investors paid an average of $11.78 per share, according to Herring.

“Investors making money in the landscape industry should attract more money to the industry,” Herring said.

BrightView expects to grant the underwriters a 30-day option to purchase up to an additional 3,195,000 shares of its common stock.

According to the SEC filing, as of March 31, the company had $1.6 billion in debt, which it intends to reduce with future free cash flow.

BrightView intends to use the net proceeds from the offering to repay borrowings outstanding under its second lien term loan facility and its revolving credit facility and, if there are any remaining proceeds, to repay borrowings outstanding under its first lien term loan facility, said the StreetInsider report.

“BrightView’s valuation, their multiple of EBITDA, will be a ceiling for what it and others will pay for a company,” Herring said. “It’s unlikely that any seller will get that valuation, but great companies may be able to split the difference if there are multiple buyers interested. Splitting the difference would be a 50 percent increase from current valuations.”

BrightView’s common stock has been approved for listing on the New York Stock Exchange under the symbol BV. However, the registration statement filed with the U.S. Securities & Exchange Commission has not become effective, and until it does become effective, these securities may not be sold and offers to buy cannot be accepted.