All five deals trade up in first batch of US IPOs since August

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Led by the 41% first-day return of real estate listings company Trulia ( TRLA ), five US IPOs priced and traded up this week. Following a 35-day lull (late August is seasonally slow for IPOs), all five priced on Wednesday the 19th, making it the busiest day for US IPOs since April 22, 2010. The week's proceeds, at $1.1 billion, exceeded $1 billion for the first time since May, and the five $100+ million deals were tied for the most in a week in 2012. While three of the five ended the week up 2% or less, the four new deals added to the IPO calendar and the steady stream of new filings suggest that activity should continue to pick up into October.

Growth and yield continue to draw in IPO investors

The two top performers from the week, Trulia (+35%) and motor fuels distributor Susser Petroleum Partners LP (+13%; SUSP), benefitted from strong investor appetite for growth and yield. Trulia, which has seen sales double in each of the past two years, priced the day after a strong report on the housing market, which pushed close peer Zillow's stock to an all-time high. Investors likely bought into Susser for both its high yield in a low-interest rate environment and the strong performance of other recent LP IPOs Hi-Crush Partners (+30%; HCLP) and Northern Tier Energy (+42%; NTI).

Three financial IPOs price down but trade up

The week's three remaining IPOs, all financial companies, priced below the range and traded up slightly. Two acquisitive banks, National Bank Holdings (+2%; NBHC) and Capital Bank Financial (+1%; CBF), were positioned for growth but had credit concerns. Spirit Realty Capital (+1%; SRC), with its focus on non-investment grade tenants, also had credit concerns and presented little differentiation from a wide selection of REITs.

Biotechs and alternative energy IPOs continue to struggle

Two other deals scheduled for this week, GlobeImmune ( GBIM ) and Smith Electric Vehicles ( SMTH ), were not completed. GlobeImmune, a biotech developing drugs for pancreatic cancer and hepatitis B and C, was delayed. Although biotech indexes have performed well in 2012, 38% of biotech IPOs have failed to get done this year. Smith Electric Vehicles, which makes electric medium-duty trucks, withdrew its IPO and will seek private financing. Smith sells its trucks at a loss and faces significant supplier issues as it tries to cut costs. Like biotechs, alternative energy IPOs have struggled, with more than half withdrawing this year.

More than $1 billion in proceeds added to the calendar

Four companies were added to the IPO calendar this week, representing a total of more than $1 billion in estimated proceeds. Berry Plastics Group ( BERY ) is seeking $500 million and is backed by private-equity firm Apollo. Apollo also backs Domus Holdings (RLGY), the world's largest franchisor of residential real estate brokerages, which filed for a $1 billion IPO in June. Luxfer Holdings (LXFR), a global materials firm specializing in aluminum, magnesium and zirconium, is looking to raise $104 million after postponing a $151 million IPO in December 2011.

US IPO setting terms this week (9/17 - 9/21)

Company (Ticker) Business Deal Size ($mm) Pricing Date
Berry Plastics Group ( BERY ) Plastic goods $500 Week of 10/1
Summit Midstream Partners (SMLP) Natural gas transport $250 Week of 9/24
LifeLock (LOCK) Online ID protection $165 Week of 10/1
Luxfer Holdings (LXFR) Global materials $104 Week of 10/1

Three companies added to the pipeline

Two financial companies and one oil and gas subsidiary submitted new filings. Seadrill Partners (SDLP), a subsidiary of Norwegian oil and gas equipment company Seadrill ( SDRL ), Silvercrest Asset Management Group (SAMG), a financial advisory firm with over $11 billion in AUM, and Gladstone Land Corporation (LAND), an agricultural REIT, filed to raise $225 million, $60 million and $58 million, respectively. Seadrill Partners had previously filed confidentially. There are now 146 companies in the US IPO pipeline seeking a total of $45.9 billion in proceeds. Of these, 66 have released updates within the past 90 days.



IPO market performance update

US IPOs from the past 90 days have produced an average total return of 29% and an average aftermarket return of 15%, down slightly from 34% and 18%, respectively, as of last week. Of these 27 deals, 23 (85%) are trading above their offer prices, with the top performers coming from the consumer and technology sectors. Year to date, the average total return for US IPOs has been 23% and the average aftermarket return has been 7%. The 96 deals equal the number at this point last year, while the total proceeds of $31.8 billion are up 9%.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: News Headlines , IPOs

Referenced Stocks: BERY , GBIM , SDRL , SMTH , TRLA

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