This is a free preview for the upcoming Virgin Trains USA Inc.
Company: Virgin Trains USA Inc.
Symbol: VTUS
Description: They own and operate an express passenger rail system connecting major population centers in Florida, with plans to expand operations further in Florida, Las Vegas and elsewhere in North America.
Shares: 28.3 million
Price Range: $17.00-$19.00
Trade Date: 2/13
Underwriter(s): Barclays, J.P. Morgan, Morgan Stanley, BofA Merrill Lynch, Allen & Co.
Co-Manager(s): JMP Securities, Raymond James, Stephens Inc.
Terms Added: 1-30-19
Business (in their words) : We are the first new major private passenger intercity railroad in the United States in over a century, and we believe our business represents a scalable model for twenty-first century passenger travel in North America.
We currently operate between Miami and West Palm Beach, one of the most heavily traveled and congested regions in the U.S. We have commenced construction of the expansion of our Florida passenger rail system to Orlando, Florida, and we intend to further expand our rail service to Tampa, Florida. Louis Berger estimates the total potential addressable market of travelers across our Miami to Tampa corridor to be approximately 413 million trips annually. We can operate up to 32 trains daily that are capable of speeds of up to 125 miles per hour, and we own stations located in the heart of downtown cities and major transit hubs in Florida. We believe our passenger rail system offers travel that is faster, safer, more eco-friendly, more reliable, less expensive, more productive and more enjoyable than travel by car or air.
On September 18, 2018, we announced our expansion to the West Coast through our proposed acquisition of DesertXpress Enterprises, LLC and certain related assets (the “XpressWest Acquisition”). The aggregate purchase price for the XpressWest Acquisition is approximately $120 million, of which approximately $60 million will be paid in cash (which we intend to fund with the net proceeds of this offering, the concurrent private placements, and/or other debt or equity financings (including the 2019 Debt Financing (as defined below))) and the balance in shares of our common stock. Pursuant to the XpressWest Acquisition, we have agreed to acquire the rights to develop a high-speed rail project within a corridor between Victorville, California and Las Vegas, Nevada that is expected to be federally approved. The XpressWest Acquisition provides us with the opportunity to develop, operate and connect Las Vegas with Southern California by means of a new passenger rail system. The Vegas Expansion will link one of the most traveled routes in the United States, connecting approximately 13.4 million people living in the Los Angeles metro area with the approximately 2.2 million people living in the Las Vegas metro area, which is one of the most visited cities in the United States. The XpressWest Acquisition is anticipated to close in the first quarter of 2019, subject to customary closing conditions. The closing of the XpressWest Acquisition is not a condition to the closing of this offering, and we cannot assure you that the XpressWest Acquisition will be consummated on our expected timeline or at all.
Insider Buying: Corvina Holdings Limited (“Corvina”), an affiliate of Virgin Enterprises Limited (“VEL”), each a part of the Virgin Group, has entered into an agreement pursuant to which it has agreed to purchase from us, at a price per share equal to the initial public offering price, shares of newly issued common stock in an amount equal to less than 2% of the number of shares outstanding immediately following this offering. In addition, certain individuals and/or entities affiliated with Fortress (including our Chairman Nominee) have indicated an interest in purchasing shares of our common stock at a price per share equal to the initial public offering price.
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