Presidio Announces Pricing of Secondary Public Offering

November 20, 2017

Financial information*

  • Enterprise Value approximately $2.2 billion

Transaction facts

  • Following the announcement of its proposed secondary offering on Tuesday, IT solution provider Presidio (Nasdaq: PSDO) announced the pricing of 8 million shares of the company’s common stock at a price to public of $14.25 per share on Nov 17. Apollo Global Management (NYSE: APO), its private equity parent, is the selling stockholder.

  • Underwriters will have a 30-day option to buy up to an additional 1.2 million shares of common stock from the selling stockholder. Meanwhile, the company is not selling any shares and will not receive any proceeds from the proposed offering.

  • The offering, which is being made only by means of a prospectus, is expected to close on or about Nov. 21, 2017, subject to customary closing conditions.

A Long-term View for Financial Strength


Top-line growth: On Nov. 6, Presidio reported promising results for its fiscal first quarter, ended Sept. 30. Revenue grew 3.7 percent, while adjusted EBITDA and pro forma adjusted net income rose 15.8 percent and 20.4 percent, respectively. In response to the top-line growth, which has been attributed to increasing demand for cloud and security solutions, CEO Bob Cagnazzi has placed confidence in the company’s ability to finish strong. In the press release, he stated: “We expect to finish Fiscal 2018 with our total net leverage ratio in the mid-2x range, excluding any material strategic acquisitions.”


New funnel: With the goal of increasing the company’s financial flexibility, the potential secondary public offering could play the role of selling shares while increasing liquidity in the stock. Presidio went public on March 10, an increasingly rarer endeavor in the face of cloud pressure and declining spending on traditional IT expenses. However, given the company’s heavy debt load and the prospect of raising capital, the IPO has granted the company new leverage.


Role of M&A: Presidio has stated its intent to make more channel acquisitions in the future, with particular regards to strategic geographic expansion and capabilities in cloud, security, internet of things and managed services. In September, the company acquired Emergent Networks, an IT adviser to enterprise organizations across Minnesota. Presidio has made strategic acquisitions of smaller solution providers in the past — in February 2016, Presidio acquired Netech Corporation, a Cisco networking specialist, and in November 2015, it acquired Sequoia Worldwide, a cloud consulting, engineering and integration firm. 


For more information about this transaction, click here to read the press release.


*Enterprise Value from S&P Capital IQ. 


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