Aventine Renewable IPO heats up

NEW YORK (MarketWatch) — Aventine Renewable Energy Holdings Inc. lifted the estimated price range Wednesday on its initial public offering, a sign of strength ahead of the ethanol maker’s stock-market debut.

Aventine Renewable
said that it plans to offer its IPO at $40 to $43 a share, ahead of the earlier range of $37 to $41 a share.

The ethanol maker kept the size of the IPO at 8.06 million shares.

At the midpoint of the new range, the company’s IPO will raise $334 million.

The IPO is expected to price later on Wednesday for its stock-market debut Thursday with underwriter Bank of America

While tough market conditions are forcing some IPOs into discounting or into pulling their deals entirely, the right offerings are catching strong interest.

J. Crew
rallied more than 20% in its first day Wednesday, even after pricing above its estimated range. See full story.

Also on Wednesday, VeraSun

rallied 6% to $26.58 as the ethanol maker heated up ahead of Aventine Renewable’s IPO. VeraSun’s IPO priced earlier this month at $23 a share, above its $20 to $22 range.

The stock cooled off from its opening day close of $30 a share on June 14, and ended the day at $24.81 Monday. The stock rebounded Tuesday and Wednesday, though.

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Aventine marks the second of three ethanol makers on deck this summer. Hawkeye Energy is still to come.

Although Aventine is a newcomer to the stock market, it features some familiar names as shareholders. Metalmark, a private-equity firm established by former principals at Morgan Stanley Capital Partners
owns a big stake in the company.

In the three months ended March 31, Aventine said that net income doubled to $12.2 million on revenue of $314 million, compared with net income of $6.6 million on revenue of $197 million in the year-ago period.

Interest in ethanol has been high, given that it’s seen as an alternative to crude oil.

Archer Daniels Midland Co.
is the largest ethanol producer in the United States, with annual production of 1 billion gallons.

View more information: https://www.marketwatch.com/story/aventine-raises-price-ahead-of-stock-market-debut

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