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Upcoming IPOs: Allison Transmission, Demandware, M/A-COM

These IPOs should get a strong reception from investors


While only three IPOs are expected to hit the market this week, they should get lots of attention from investors. Here’s a look at each:

Allison Transmission

A spin-off of GM (NYSE:GM), Allison Transmission is the world’s largest manufacturer of fully automatic transmissions for medium- and heavy-duty commercial vehicles, transit buses and military vehicles.

Founded over 60 years ago, Allison has continued to be an innovator. Consider that it has over 10,000 unique transmission calibrations, which require precision manufacturing and top-notch software engineering.

As the auto industry rebounds in North America, Allison will likely get a nice boost. The company has also been aggressive in Asian markets, especially China. It has 35,000 installations in the country already.

Allison has long-standing relationships with thousands major customers like FedEx (NYSE:FDX), Coca-Cola (NYSE:KO), Waste Management (NYSE:WM) and UPS (NYSE:UPS). Last year, the company generated $2.16 billion in revenues and adjusted EBITDA of $711.9 million.

The lead underwriters include Bank of America (NYSE:BAC), Citigroup (NYSE:C) and JP Morgan (NYSE:JPM). Allison plans to issue 21.7 million shares at a range of $22 to $24. The proposed ticker is ALSN.


Demandware operates a cloud-computing system that helps companies create their own e-commerce sites. The platform allows for lots of customization and is available for multiple uses, such as mobile devices, tablets and even in-store kiosks.

Demandware currently has 101 clients, which include some of the world’s top retailers like Barneys New York, Burton and Columbia Sportswear.

From 2009 to 2011, revenues soared from $21.4 million to $56.5 million. Yet the company sustained a net loss of $1.4 million last year.

Of course, the cloud space has seen a string of hot deals lately, such as Jive (NYSE:JIVE) and Brightcove (NYSE:BV). So, Demandware should also get a strong reception.

The lead underwriters include Goldman Sachs (NYSE:GS) and Deutsche Bank (NYSE:DB). Demandware plans to issue 5.5 million shares at a range of $12.50 to $14.50.  The proposed ticker is DWRE.

M/A-COM Technology

March 2009 was certainly a scary time for investors. But tech entrepreneur John Ocampo saw an opportunity. He shelled out $90 million for M/A-COM Technology Solutions, or MTS, which was a struggling analog semiconductor company.

Now it looks like Ocampo will have a nice payday. M/A-Com plans to sell 5.5 million shares at a range of $17 to $19. The underwriters include Barclays Capital (NYSE:BCS), J.P. Morgan and Jefferies (NYSE:JEF). The proposed ticker is MTSI.

Founded 60 years ago, MTS is a top chipmaker for wireless and wireline applications. The company has a line of over 2,700 integrated circuits, multichip modules and other devices. They have long lifecycles, ranging from 5 to 10 years.

And yes, MTS has ramped up its spending on research and development, and has focused on higher-margins businesses. All in all, these efforts have been getting results. From fiscal 2010 to 2011, revenues went from $260.3 million to $310.3 million. Income from operations came to $45.9 million.

Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli. As of this writing, he did not own a position in any of the aforementioned securities.

Article printed from InvestorPlace Media,

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