BankUnited files for IPO to raise up to $300 million

By Clare Baldwin

NEW YORK (BestGrowthStock) – BankUnited Inc, owned by some of the world’s biggest private equity firms, filed on Friday to raise up to $300 million in an initial public offering that will serve as a test case for flotations of buyout-backed banks.

It would be the first IPO by a major U.S. bank bought by private investors during the financial crisis.

“It is backed by some well-known investors, which maybe gives people a reason to look at it who might not otherwise,” said Nick Einhorn, an analyst with Connecticut-based IPO research house Renaissance Capital.

The other major bank owned by private equity firms is OneWest Bank, the former IndyMac. Its owners have not yet indicated when they plan to exit their investment.

Private equity firms, including Wilbur Ross’s WL Ross & Co, Carlyle Group (CYL.UL: ), Blackstone Group (BX.N: ) and Centerbridge Partners, bought the assets of failed BankUnited FSB in May 2009 from the Federal Deposit Insurance Corp.

The firms put $900 million in the bank and appointed former North Fork Bank head John Kanas as CEO. They entered a loss sharing agreement with the FDIC.

On Monday, two sources familiar with the matter told Reuters the Miami Lakes, Florida-based bank was planning to file for an IPO this week. The bank will use the proceeds from the IPO and a secondary offering to buy other banks, one of the sources said.

The filing said only that BankUnited planned to use the proceeds for general corporate purposes.

As of June 30, BankUnited had assets of $11.21 billion and liabilities of $10.01 billion. Its net income in the six months ended June 30 was $111.88 million. The bank on September 17 declared a quarterly dividend of $14 million. On October 19 it also declared a one-time dividend of $6 million.

BankUnited has more than 75 branches, primarily in the U.S. Southeast. It plans to eventually open branches in New York.

Financial sector IPOs in the United States recently have been plentiful but not always lucrative.

So far this year there have been 20 IPOs in the financial sector in the United States, making the sector the second most active after technology.

Financial sector IPOs have raised a total of $3.8 billion, according to data from Renaissance Capital. On average, IPOs in the sector have returned 3.3 percent, far lower than the IPO average of 17 percent.

Flotations by two banks have flopped.

Bank holding company First Interstate BancSystem Inc (FIBK.O: ) went public in March. The shares did well initially but are trading 10.3 percent below their IPO price. Washington-based Fortune Bank in July shelved its IPO plans.

Morgan Stanley, Bank of America Merrill Lynch, Deutsche Bank and Goldman Sachs are leading the underwriters on the BankUnited IPO. The bank’s regulatory filing did not specify how many shares would be sold or give an expected price range.

The shares are expected to trade on the New York Stock Exchange under the symbol “BKU.”

(Reporting by Sweta Singh in Bangalore and Clare Baldwin in New York; Editing by Prem Udayabhanu, John Wallace, Richard Chang and Bernard Orr)

BankUnited files for IPO to raise up to $300 million