NEW YORK (AP) — Shares of Re/Max jumped in the real estate brokerage's first day on the New York Stock Exchange.
The shares added $5.35, or 24.3 percent, to $27.35 in afternoon trading. Re/Max Holdings Inc., which filed plans in August to go public, priced its initial public offering of 10 million shares at $22 each. That was above the projected range of $19 to $21 per share.
The Denver company raised $220 million in the offering. It is trading under the "RMAX" ticker symbol. Re/Max is giving the underwriters a 30-day option to buy up to an additional 1.5 million shares to cover any excess demand.
The company anticipates about $194.2 million in net proceeds, after underwriting discounts and commissions and estimated offering expenses. Re/Max plans to use the proceeds to reacquire regional Re/Max franchise rights in some markets, redeem preferred membership interests and buy back ownership stakes from existing shareholders.
CEO Margaret Kelly said in an interview that access to capital markets also will help the company with its goal of increasing its dividend. "We have a very modest dividend the first year, because obviously this is the first time we've done it," Kelly said. "But we want to get to the point of paying dividends like other franchisors pay."
Re/Max, founded in 1973, is a franchisor of real estate brokerage services. It recruits agents and sells franchises and franchising rights to those who want to operate under the RE/MAX brand. The company has more than 90,000 agents and 6,300 offices around the world, but gets the bulk of its revenue from the U.S.
In 2012, the company reported net income of $18 million on revenue of $143.7 million. Re/Max is one of several real estate-related companies to go public recently. Realogy Holdings, which operates real estate brokerages under brands like Century 21, Coldwell Banker and Sotheby's International Realty, debuted in October. Real estate website operator Trulia Inc. went public in September and online real estate information company Zillow Inc. began selling shares in 2011.
Other companies going public on Wednesday include Empire State Realty Trust, owner of the Empire State Building in New York, and discount retailer Burlington Stores.