Virgin America raised about $305.9 million in its initial public offering on Thursday, meeting expectations as the low-cost airline backed by Richard Branson prepares for a new life as a publicly traded company.
At the offering’s price of $23 a share, the company came in at the middle of its expected price range of $21 to $24 a share. The stock sale values the airline at about $972.9 million.
In going public, Virgin America — best known for its fancy aircraft interiors, including onboard WiFi, interactive video displays and purple lighting — will be taking flight at a boom time for airlines. Fuel costs have fallen drastically as the price of oil has tumbled, while ticket prices have crept up.
Though it began offering flights in 2007, the company reported its first profit only last year, earning $10.1 million on $1.4 billion of operating revenue. Still, sales have steadily risen.
Though sharing its name with Mr. Branson’s Virgin empire, Virgin America counts the British billionaire as only a minority shareholder. Mr. Branson’s Virgin Group owns about 22 percent of the company’s voting stock, limited in part by American regulations that restrict foreign ownership in domestic airlines to under 25 percent.
Another major shareholder is Cyrus Capital Partners, a hedge fund.
At the same time as the I.P.O., the Virgin Group and Cyrus are planning to sell about $52.1 million in shares in the airline to another hedge fund, PAR Capital, at a per-share price 4 percent lower than the I.P.O. price. PAR Capital has the option to call off the private deal if the price range rises any higher, according to the latest prospectus.
The airline’s offering pricing follows that of another company within the Virgin empire: Virgin Money, a British lender that aims to challenge more traditional banks. The financial firm was valued at about $2 billion in its I.P.O.
Virgin America’s I.P.O. will be led by Barclays and EU-IS Group