Everything You Need to Know About the Ascensus IPO

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Aja McClanahan is a personal finance writer who has a story of getting out of over $120,000 in debt. She's been featured in Yahoo! Finance, MarketWatch, U.S. News and World Report, Kiplinger and has written for publications like Business Insider, Credit Karma, Inc., and many others. Aja writes about investing and personal finance for Wealthsimple. In her spare time, she manages her own investment portfolios for herself, husband, and two kids. Aja double majored in Spanish and Economics and holds a Bachelor of Arts degree from University of Illinois at Urbana-Champaign.

Investing in companies that excite you can be a great way to add value to your portfolio. But what if the company is privately owned and you can’t buy shares? Fortunately, there are plenty of companies this year going public, so you’ve got many ways to invest in companies you know and love.

Ascensus, a financial services company, is one of many companies that might have an initial public offering (IPO). An IPO means that shares of the company will be available for the general public to purchase.

If you’d like to add shares of this company to your portfolio, here’s some information that might help you understand the company and how to invest in the Ascensus IPO.

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What is Ascensus?

Ascensus was founded in 1980 as The Barclay Group, a financial services company that provided 401(k) retirement plan design, communication, and recordkeeping services.

A series of mergers, acquisitions, divestments, and other transactions created Ascensus as it’s known today. Currently, it’s the largest independent third-party administrator and government and health savings facilitator in the United States. Ascensus provides retirement distribution tools, business retirement plan selection systems, online IRA modeling and enrollment, online education, and online reference materials for its clients.

The company has $393.4 billion in assets under management and counts businesses, governments, banks, and individuals as customers. Competitors include companies like Fi360, Venerable, and JFS advisors.

The company services clients by providing administration for:

  • Retirement accounts

  • Education savings

  • Health savings

  • ABLE- (supports savings for disability-related expenses)

Starting in 2015, Ascensus began to take on outside investors and was the subject of an acquisition by a private equity firm. Then, Ascensus acquired Chard Snyder in 2018. This acquisition allowed Ascensus to expand into the consumer-directed health and benefits administration marketplace.

What is Ascensus’ current market cap?

Ascensus is not yet publicly traded, so there are no official records providing details about the company’s market cap. However, you can make some estimates based on recent transactions like acquisitions, divestments, mergers, etc.

In April, 2021, two private equity companies, Stone Point Capital and GIC Pte agreed to acquire a majority stake in Ascensus, while at least two current owners, Genstar Capital and Aquiline Capital Partners, will remain with a minority stake. Though exact terms of the deal have not been disclosed, according to sources familiar with the deal, the buyout was worth about $3 billion. (Genstar Capital and Aquiline Capital Partners acquired Ascensus in 2015 in a deal that was reportedly worth about $750 million.)

Though there are no official reports on the state of Ascensus’ finances or how much, per share, the company is worth, these transactions can indicate what the company could be worth or how much it could raise with an initial public offering event.

When is the Ascensus IPO taking place?

Neither Ascensus spokespeople nor independent media representatives who cover IPO news have announced news regarding an exact IPO date. With the announcement regarding the recent acquisition, it’s possible that the transition in ownership could take the place of, delay, or rule out an IPO event.

If the objective of raising more capital was achieved through the acquisition, an IPO might not be a priority anymore. Another possibility is that the acquisition could bring in more resources and leadership to prepare the company for an IPO.

But so far, nothing other than guesses and speculation have been raised about the company’s potential IPO event. However, this doesn’t mean that Ascensus directors will not pursue this path.

If you’d like to watch out for developing news regarding an Ascensus IPO, here are some milestones that might indicate a company is nearing an official IPO.

An investment bank is chosen

The investment bank is responsible for structuring the IPO and getting commitments from buyers before opening day (when stocks are officially for sale on an exchange). These buyers could be institutional investors or high-net-worth individuals.

Appropriate documents are filed

Before going public, a company must file an IPO prospectus, or S-1 prospectus, with the Securities and Exchange Commission (SEC). This information contains financial data and an overview of risk factors investors should consider before buying shares of the company.

The “roadshow” begins

In this phase, company management meets with prospective investors to “pitch” the company. Typically, the company’s CFO will be present and field questions from buyers who will likely commit to buying millions of dollars worth of shares before opening day.

A price and number of shares are set

The night before the IPO, the investment bank and company executives will have a final meeting to set the IPO price and determine how many shares they will make available. By opening day, the general public will know the share price and number of shares available for purchase on the public exchange.

So far, none of this has happened with Ascensus. Typically, the most definitive move for an IPO comes when a company submits its S-1 filing. As a rule of thumb, companies typically go public 1-2 months after this filing.

Why are people interested in buying Ascensus shares?

Investors may be attracted to the growth potential of the company, the industry, or both. It also helps to see that the company has already weathered transactions like mergers, acquisitions, etc., which might signal to investors that the company is viable enough for any number of profitable exit events.

How can I buy shares of Ascensus?

Once you find out the company’s IPO is imminent, you can prepare to buy stock as soon as it’s available to the general public.

As you would with any investment, read the company prospectus to understand its business model, risks, and financial history and projections before investing. In the meantime, you can also familiarize yourself with common terms associated with IPO events:

  • Common stock: Shares of a company’s stock that allow shareholders to vote on company policies and receive dividends from the company (if they declare dividends). During an IPO, common stock is available for purchase.

  • Issue price (or offer price): The price for shares of common stock available to investors before the stock is available on a public exchange.

  • Lot size: The smallest number of shares you can bid on during the IPO.

  • Preliminary prospectus: A disclosure document for public consumption. It outlines information about the business, business model, historical finances, risks, and opportunities.

  • Price band: Pricing for shares sold to different categories of investors i.e., institutional investors versus retail investors

If you are comfortable with the pricing and feel like the information disclosed aligns with your investing strategy, the steps to invest in the company on opening day are straightforward:

  1. Find a brokerage firm. Online is ideal. Your account can be opened and funded in just a few days once your personal information is verified.

  2. Place an order for the stock according to your investment objectives: market, limit, stop order, or buy stop order are common orders used to buy shares.

  3. Wait for confirmation that your order has been received and completed.

Once you’ve placed your order and you are an official investor in the company, be sure to check in on your investment from time to time. Make sure the company’s core principles and operating philosophies align with your personal convictions and financial goals. If so, you can always increase your position in the company as time passes. If not, you can always sell your shares as needed.

Last Updated June 21, 2021

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