Co aims to raise $1.62 billion in IPO
Forgent to list on NYSE under ticker "FPS"
Co targets high-growth markets like data centers
Adds analyst comments in paragraphs 4 and 5, background in paragraphs 3 and 6
By Prakhar Srivastava
Jan 26 (Reuters) - Electrical equipment maker Forgent Power said it was targeting a valuation of up to $8.83 billion in its initial public offering in the United States, testing investor appetite for data center-linked firms amid the artificial intelligence boom.
The Minnesota-headquartered company and some of its existing shareholders said on Monday they are aiming to raise as much as $1.62 billion by offering about 56 million shares priced between $25 and $29 apiece.
Forgent focuses on high-growth markets such as data centers, as tech companies, including OpenAI, pour billions of dollars into new facilities to keep pace with the exploding computing needs of cloud services and AI.
IPOX associate Lukas Muehlbauer said Forgent's 42% revenue from AI data centers represented a rare level of concentration in public markets, allowing investors to bypass diversified energy conglomerates to make a direct play on AI spending.
"At a price-to-sales ratio of 10x, Forgent is asking a premium over peers", Muehlbauer said, adding investors must decide if its high revenue growth justifies the higher price despite thinner profit margins.
Steadier markets and interest rate cuts have also drawn companies from across sectors back to test investor demand for new listings, after a prolonged government shutdown in October forced many to shelve their plans.
Jennifer Garner's Once Upon a Farm and Bob's Discount Furniture also revealed the terms of their offerings on Monday, while EquipmentShare.com EQPT.O and BitGo BTGO.N made strong market debuts last week.
Forgent Power, which aims to list on the New York Stock Exchange under the ticker symbol "FPS", designs and manufactures electrical distribution equipment for data centers, power grids and energy-intensive industrial facilities.
Goldman Sachs, Jefferies and Morgan Stanley are the joint lead book-running managers for the offering.
(Reporting by Prakhar Srivastava in Bengaluru; Editing by Vijay Kishore)
((Prakhar.srivastava2@thomsonreuters.com;))