Frac Tech IPO a Good Call, Observers Say
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Frac Tech International's plan for an initial public stock offering is likely to get a warm welcome from investors who are looking for a strong industry to buy into, experts say.
Fort Worth-based Frac Tech this month proposed raising up to $1.15 billion with the offering. It intends to put the proceeds toward repaying $1.5 billion in long-term debt.
'The IPO market is pretty volatile right now and recently about as many have been withdrawn as have been filed,' said Terry Schpok, a Dallas-based partner at the law firm Akin Gump Strauss Hauer & Feld LLP. 'But if you had to pick an industry to do an IPO in today, energy services would be one of the better ones because what offsets a declining market is a high market for oil prices.'
Joe Dunleavy, a partner at accounting, auditing and consulting firm PwC in Houston, said energy-related IPOs have increased in 2011.
'Companies look at the energy sector as one that's long dealt with volatility, and they're well able to weather the volatility,' Dunleavy said. 'So this type of IPO is not surprising, even given the economic climate that we're in now.'
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