This week we have two pre-shutdown regular way IPOs on the calendar. Last week we had another vaporware company, Fermi, get a $15B valuation. More on that below.
Phoenix Education $PXED combines a checkered past with a decent value opportunity: the business has improved enough to suggest the stigma may be behind them. If you're willing to overlook the past, the combination of improving metrics, a good balance sheet and a valuation discount makes the risk reward favorable.
Alliance Laundry $ALH offers the comfort of industrial predictability at a fair price. The replacement-driven revenue model, market-leading position, and deleveraging opportunity makes it unexciting but safe - at least until AI washing robots come along. Margins in this business are better than you might think!
Phoenix Education: Brings back fraud old memories!
Phoenix Education $PXED has a storied past as an education-loan Ponzi scheme from the 1990's. I won't review the whole mess but basically they were operating a boiler room of sorts enrolling semi-willing "students" into degree programs paid for with government sponsored loans. Prior to that they were known as a kind of "degree mill" where you could basically "buy" a PhD.
Apollo has worked hard to clean the company up and overinvest in regulatory compliance and business control. They will still have majority control but would like to start to monetize what has been a portfolio burden.
The numbers have been good - revenue climbed from $835 million in FY2023 to $950 million in FY2024 and net income nearly doubled from $66 million to $115 million over the same period. Preliminary FY2025 results suggest the company is tracking toward $1 billion in revenue with net income of ~$135 million. Those are good numbers for a company acquired back in 2017 for just over $1B.
I still have doubts about the company. I found metrics regarding graduation and placement rates that don't seem nearly as positive as those presented in the roadshow.
There's also a major issue facing higher education in general which is the shrinking number of "entry level" jobs for degree holders thanks to increasing AI adoption. It has called into question the ROI from paying tuition and amazing loans for a generic degree which is what Phoenix represents.
They have pivoted to B2B enrollment which helps employers who want to retrain and retool their workforce. It's a better and less regulated business.
The main selling point is the proposed valuation at $31-33 the $1.1B valuation is just over 1x sales, a 10 P/E and under 5x EV/EBITDA. Very cheap for growth of ~15% and 23% EBITDA margins.
The cheapness and relatively low float could make it a decent deal. Investors will also want to keep in mind that Apollo will be keen to sell more when they can.
Alliance Laundry: Dull, high margin business.
Alliance Laundry is over 100 years old and an industrial stalwart in the commercial laundry business.
They plan to raise $750 million through 34.1 million shares priced at $19-22. At the midpoint, this creates a $4.2 billion valuation for the world's largest commercial laundry equipment manufacturer.
The company's has a strong market position: claiming roughly 40% of North American commercial laundry share through brands like Speed Queen, UniMac, and Huebsch, with distribution across 150+ countries. Revenue grew 15% to $837 million in the first half of 2025, though net income declined from $68 million to $48 million year-over-year as raw material costs—particularly steel and aluminum—pressured margins.
Alliance's business has genuine moats. The company's installed base of 8+ million machines generates steady replacement-driven revenue, while its distributor network—many partners loyal for over a decade—creates switching costs that protect market share. The typical commercial washer lasts 15-20 years, creating predictable replacement cycles that smooth revenue volatility.
The IPO proceeds will primarily address Alliance's $2.1 billion debt load, a significant overhang that currently constrains financial flexibility. BDT & MSD Partners will retain 76% ownership post-offering, maintaining control while providing liquidity. At ~10x EBITDA, the valuation is undemanding, particularly given institutional commitments from Capital International and Kayne Anderson Rudnick.
The valuation doesn't make it a bargain but I'd at least watch it. After the balance sheet improves and margins begin to improve the timing would be better.
The wild card is their upcoming breakthrough in an improved lint capture solution (I'm not kidding.) which will help maintain product leadership and might nudge the very long replacement cycle.
Fermi America: Rick Perry Fever Dream
Fermi $FRMI looked more like a dry run than a real IPO. The "roadshow" was a whiteboarding session at some meetup investment group held in a private room at a Texas steakhouse. Seems totally legit!
Fermi is a REIT "focused on delivering up to 11 GW of low-carbon, Hyperredundant, and on-demand power to support AI infrastructure. The company is developing Project Matador, a multi-gigawatt energy and data center campus on a 5,263-acre site in Amarillo, Texas, with plans to have 1 GW of power online by the end of 2026. Project Matador is designed to deliver up to 11 GW of behind-the-meter energy and support up to 15 million square feet of AI-ready hyperscale compute infrastructure by 2038, utilizing a mix of natural gas, nuclear, and solar energy."
Fermi does admit the truth in that what they actually have is a "long term lease on the site" which is "in a good location" and they "have an accepted application by the NRC." ... so pretty much nothing.
The deal priced last week in the range at $21 and traded as high as $36 when at least some people started coming to their senses. Still the company has been afforded a $15B-$18B valuation on swagger and promises.
I like a "can do" attitude as much as the next guy but this is a lot to ask pre-anything.
Some smart institutional investors just said "What, Rick Perry, that's all I need to know!" You'll have to think about what they were getting at... ;-)
