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Commercial real estate services firm Newmark downsizes IPO


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Banking Essentials Newsletter: September Edition

Commercial real estate services firm Newmark downsizes IPO

Newmark Group Inc. reduced its IPO to 20.0 million shares of class A common stock from an initial target of 30.0 million shares.

The commercial real estate services firm, which is being spun off from BGC Partners Inc., also lowered its offering price target to a range of between $14.00 and $15.00 per share from between $19.00 and $22.00 per share initially. At the midpoint of the range, the net offering proceeds are estimated to be about $268.1 million, or $309.2 million if the underwriters fully exercise their 30-day option to buy up to 3.0 million additional class A common shares.

Newmark plans to inject the net proceeds into Newmark Partners LP, its principal operating unit, in exchange for a number of units representing limited partnership interests in the OP equal to the number of shares the company is issuing in the IPO. The operating partnership will use the funds to partially repay to Newmark a $575.0 million term loan due Sept. 8, 2019. Newmark will, in turn, use that repayment to partially repay the term loan, which it will assume from BGC Partners prior to the close of the offering.

Newmark applied to list its class A common stock on the Nasdaq Global Select Market under the NMRK ticker. BGC Partners expects to pursue a distribution to its shareholders of all the Newmark common shares that it then owns in a manner that is intended to qualify as generally tax-free for U.S. federal income tax purposes, according to a filing.

Goldman Sachs & Co. LLC, Merrill Lynch Pierce Fenner & Smith Inc, Citigroup Global Markets Inc., Cantor Fitzgerald & Co., PNC Capital Markets LLC, Mizuho Securities USA LLC, Capital One Securities Inc., Keefe Bruyette & Woods Inc., Sandler O'Neill & Partners LP, Raymond James & Associates Inc., Regions Securities LLC, CastleOak Securities LP and Wedbush Securities Inc. are the underwriters for the IPO.