Steve Gelsi, MarketWatch
Last Update: 11:17 AM ET May 31, 2006
NEW YORK (MarketWatch) -- Hawkeye Holdings has filed to raise up to $350 million in an initial public offering as ethanol emerges as a summer trend in the IPO market in the face of lofty gasoline prices.
Hawkeye Holdings marks the third ethanol deal to emerge in recent weeks after VeraSun fattened its IPO to $328 million from $150 million, and Aventine Renewable Energy filed its IPO.
The move in the IPO market corresponds with efforts in Washington, where new legislation is being proposed to boost the number of service stations selling gas with ethanol blended in.
All three deals have ties to big names on Wall Street as institutions line up to fuel the growth of ethanol with an eye on future profits.
Thomas H. Lee Partners took an 80% stake on May 11 in Hawkeye Holdings in a deal that valued the ethanol maker at about $1 billion.
Metalmark, a private-equity firm established by former principals of Morgan Stanley Capital Partners (MS : morgan stanley com new
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MS59.62, +0.51, +0.9%) , owns about 40% of Aventine.
VeraSun's shareholders include Eos Partners L.P., Bluestem Funds and Donald Endres, 45, chief executive officer and director of the company.
Hawkeye widens first-quarter profit
Hawkeye, which ranks as the third largest ethanol producer in the U.S. based on production capacity, said first-quarter net income rose to $6.8 million on revenue of $27.7 million, from net income of $1.4 million and revenue of $18 million in the year-ago period.
The Iowa Falls, Iowa company plans to trade on the New York Stock Exchange.
Hawkeye buys corn and converts it into ethanol, a type of grain alcohol. The company plans to break ground on a third plant in 2006 and a fourth in 2007.
Steve Gelsi is a reporter for MarketWatch in New York.
