EP Energy Corp., the natural gas producer backed by Apollo Global Management LLC (APO:US), raised $704 million in its initial public offering, pricing a reduced number of shares below the marketed range.
The company sold 35.2 million shares for $20 each, according to data compiled by Bloomberg, after offering them for $23 to $27 apiece. The shares will begin trading tomorrow, listed on the New York Stock Exchange under the symbol EPE. At the IPO price, EP Energy has a market value of about $4.97 billion, based on the terms in the prospectus.
A group led by Apollo acquired EP Energy, El Paso Corp.’s oil and natural gas exploration business, in 2012 for $7.15 billion, the second-biggest private-equity takeover of an energy producer. Riverstone Holdings LLC and Access Industries Inc. and other investors joined Apollo in the acquisition, done to help finance pipeline operator Kinder Morgan Inc.’s $21.1 billion purchase of El Paso.
Apollo and its co-investors -- Riverstone; Access Industries, an investment vehicle of Russian-born investor Len Blavatnik, Korea National Oil Co. and EP’s senior managment -- invested a combined $3.23 billion in the deal, according to the IPO prospectus.
At $20 a share, their equity has a market value of $4.175 billion. In addition, EP paid the investors $542 million in dividends in 2012 and 2013. That results in an unrealized gain of more than 40 percent.
Credit Suisse Group AG and JPMorgan Chase & Co. managed the offering.
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