After a slow holiday week started off the year, IPO activity
is picking up steam. Five new deals have launched this week and
scheduled to price the week of January 14
. The group is comprised of data center REIT CyrusOne (CONE),
cruise operator Norwegian Cruise Line (NCLH) and three LPs,
USA Compression Partners (USAC), CVR Refining LP (CVRR) and
SunCoke Energy Partners LP (SXCP). January is typically the
slowest month of the year for IPO pricings,
averaging only six new deals since 2003
, with a peak of 15 new deals in 2006 and a low of zero in both
2003 and 2009.
CyrusOne, a Cincinatti Bell carve-out, operates data center REITs
primarily in Texas and Ohio and will attempt to capitalize
on investor interest in this sector caused by the ongoing shift
to outsourced data center infrastructure. Comparable companies,
such as Digital Realty Trust (
) and DuPont Fabros Technology (
), have vastly outperformed the broader markets since November.
In addition, close comparable CoreSite Realty (
) is currently trading at an all time high and is up over 30%
from its mid-November price.
Owned by Asian cruise and gaming company Genting HK and PE firms
Apollo and TPG, Norwegian Cruise Line is the third largest cruise
line operator in North America behind Carnival (
) and Royal Caribbean (
). The company is planning on adding three new ships to its
11-ship fleet over the next three years. It is betting
on a recovery in demand after a tough macro environment coupled
with the Costa Concordia disaster caused top-line growth to
decelerate meaningfully in 2012.
Like CyrusOne, the LPs will also seek to take advantage of strong
performance by their peers. USA Compression Partners originally
filed for an IPO in June 2011 and was likely encouraged to launch
its deal after the run of successful LP IPOs in late 2012. Since
September, nine LPs have have gone public, of which eight have
traded up and four have risen by more than 30%. The lone
exception, Lehigh Gas Partners (LGP), is down only 0.5% since its
October debut. CVR Refining LP, which is set to be the largest of
the five deals at $500 million, should also be encouraged by the
strong performance of refiner PBF Energy (PBF), which has traded
up 6% since its December debut. Icahn Enterprises has indicated
an interest in buying $100 million on the offering.
Following a tepid December, it is not surprising that this first
wave of IPOs is driven by two sectors where there appears to be
considerable investor appetite. This strong start to 2013 bodes
well for the coming months. In addition to the companies that
launched deals this week, there are a variety of companies
that could schedule their debuts in the near future,
including several confidential filers.
|Deals scheduled for week of January 14
| Price Range
|LP providing natural gas compression
services in the U.S.
CVR Refining, LP
|LP formed to own and operate petroleum
refining and auxiliary businesses
|Cincinnati Bell's data center REIT.
Norwegian Cruise Line
|Third largest cruise line operator
in North America
SunCoke Energy Partners
|Owner and operator of
cokemaking facilities and related energy assets.
*$ in millions.