IPO Report: Commercial Credit (CCR)

Francis Gaskins |

Commercial Credit IPO, Commercial Credit IPO price, Commercial Credit IPO date, stocks to buy now, IPOs this week, small-cap stocks

Commercial Credit (CCR) is an independent financial services company engaged in the financing of commercial equipment. CCR provides secured loans and, to a lesser extent, leases to businesses that operate in the construction, fleet transportation and waste industries in the United States and Canada. It is based in Charlotte, NC.

Eleven other companies are scheduled to IPO for the week of May 4. The full IPO calendar is available at IPO Premium.

SEC Documents

Manager, Joint-managers: J.P. Morgan, Keefe, Bruyette & Woods

Co-managers: BMO Capital Markets, SunTrust Robinson Humphrey, and Wells Fargo Securities/ BB&T Capital Markets

End of lockup (180 days): Tuesday, November 3, 2015

End of 25-day quiet period: Monday, June 1, 2015

CCR scheduled a $116 million IPO with a market capitalization of $278 million at a price range midpoint of $16 for Thursday, May 7, 2015 on NYSE.

Commercial Credit (CCR) IPO Summary

CCR is an independent financial services company engaged in the financing of commercial equipment. CCR provides secured loans and, to a lesser extent, leases to businesses that operate in the construction, fleet transportation and waste industries in the United States and Canada.

Commercial Credit (CCR) IPO Valuation

Glossary

Valuation Ratios

Mrkt Cap (mm)

Price /Net finance  income

Price /Erngs

Price /BkVlue

Price /TanBV

% offered in IPO

Commercial Credit (CCR)

$278

7.6

23.2

2.3

2.3

42%

             

Commercial Credit (CCR) IPO Conclusion

Loans/leases to construction, fleet & waste management

Neutral

Shareholders selling 39%

P/E of 23, would like to see a lower P/E

Price to sales of 7.6

Net finance income +37%, Net income +37.7%

Selling 42% on the IPO

Commercial Credit (CCR) Business

CCR is an independent financial services company engaged in the financing of commercial equipment. CCR provides secured loans and, to a lesser extent, leases to businesses that operate in the construction, fleet transportation and waste industries in the United States and Canada.

Target customers
CCR’s target customers are primarily middle-market, family-owned businesses, and the equipment they finance with CCR is, in many cases, vital to their operations.

This equipment includes mobile cranes, earth moving and paving equipment, over-the-road trucks and trailers, waste collection trucks and related equipment that are produced primarily by nationally recognized manufacturers.

CCR’s business is relationship and service oriented. The loans and leases CCR originates enables its customers to acquire equipment and refinance existing obligations.

Commercial Credit (CCR) Sales

CCR has a team of more than 50 experienced sales representatives who work directly with its customers, which CCR believes, given the size of their businesses, are often underserved by larger financial institutions.

CCR complements its interaction with customers by building and maintaining relationships with equipment vendors and manufacturers and educating them about its financing parameters.

However, CCR does not rely on marketing programs with equipment vendors or manufacturers to source new business.

CCR believes that knowledge of its customers, their industries and the equipment they employ enables CCR provide superior customer service and customized financing solutions while maintaining strong credit quality.

Commercial Credit (CCR) Loan & Lease Origination

Since its inception in October 2004, CCR’s sales force has directly originated $1.9 billion of loans and leases.

As of December 31, 2014, CCR had a finance receivables portfolio of $611.5 million, comprised of over 3,900 loans and leases to more than 1,800 customers.

CCR originates loans and leases that typically range from $50,000 to $2.5 million per transaction.

For the nine months ended December 31, 2014, CCR’s average new contract was approximately $209,000, had an original term of 46 months and had a yield of 9.8%.

Commercial Credit (CCR) Intellectual property

None

Commercial Credit (CCR) Competition

CCR competes with national and regional banks, manufacturer-owned and other finance and leasing companies, and other financial institutions.

Some of CCR’s competitors may be better positioned to market their services and financing programs because of their ability to offer more favorable rates and terms and other services. Such rates may be impacted by the competitor’s size, access to financial resources and cost of capital.

Commercial Credit (CCR) 5% Shareholders Pre-IPO

Lovell Minnick Equity Partners III LP       51.8%    

Lovell Minnick Equity Partners III-A LP    23.1%    

A/B Partners X LLC       7.4%    

Daniel McDonough        6.3%                            

Commercial Credit (CCR) Dividends

No dividends are planned.

Commercial Credit (CCR) IPO Use of Proceeds

CCR expects to receive $62 million from its IPO and use it for the following:

to retire the outstanding aggregate principal amount of its 12.75% senior subordinated notes due 2018 in the amount of $33 million, plus any interest and fees, pay down its bank borrowings in the amount of $25 million and for working capital and general corporate purposes.

 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

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