Seven deals began trading on Thursday, marking the most US
IPOs to debut in a day since December 15, 2004. Thursday's group
included single-family residential REIT American Residential
), packet-optical networking vendor Cyan (
), frac sand LP Emerge Energy Services (
), mortgage producer and servicer PennyMac Financial Services (
), the world's largest contract research organization Quintiles
), biotech Receptos (RCPT), and branchless bank TriState Capital
TriState Capital was the best performing deal, finishing the day
up 9.5%. Receptos (traded flat), American Residential Properties
(flat) and Emerge Energy Services (-2.7%) all priced below
the midpoint and failed to gain traction throughout the day.
Quintiles and Receptos price upsized deals at opposite
ends of the range
Quintiles, the world's largest CRO and provider of commercial
outsourcing services to biopharmas, raised $947 million by
offering 23.7 million shares (45% insider) at $40, the top of the
$36 to $40 range. The company had originally filed to sell 19.7
million shares (30% insider), resulting in a deal size 26% larger
than anticipated. However, primary proceeds remained constant at
$525 million, with the increased pricing offset by a lower number
of primary shares offered (13.1 million vs. 13.8 million). At the
$40 offer price, Quintiles commands a fully diluted market cap of
$5.4 billion and an enterprise value of $6.8 billion. Quintiles
finished its first day of trading at $42.11, up 5.3% from its
Receptos, an early-stage biotech developing treatments for
relapsing multiple sclerosis and inflammatory bowel disease,
raised $73 million on Wednesday by offering 5.2 million shares
(up from 4.7 million) at $14, the low end of the $14 to $16
range. Insiders were expected to buy $17 million of the IPO,
reducing the effective float to $56 million. Receptos commands a
market cap of $246 million, with $97 million in post-IPO cash.
Receptos closed the day at its IPO price of $14.00.
American Residential and Emerge Energy price below the
midpoint, trade down
American Residential Properties, an internally managed REIT
focused on leasing single-family residential properties, raised
$288 million by offering 13.7 million units at $21, at the low
end of the $21 to $23 range. As of March 31, 2013, the REIT owned
a portfolio of 2,531 properties across 10 states (41% in Arizona)
with an 86% occupancy rate. American Residential rallied to
finish the day at its IPO price of $21.00, after spending most of
the day below its offer price.
Emerge Energy Services LP, formed by private equity firm Insight
Equity to produce frac sand and process transmix fuel, raised
$128 million by offering 7.5 million units at $17, below the $19
to $21 range. Emerge Energy is a play on the increasing
popularity of hydraulic fracturing, which is expected to nearly
double frac sand demand by 2021. Emerge Energy closed its first
day of trading at $16.55, down 2.7% from its IPO price.
Cyan, TriState, and PennyMac price at the midpoint, trade
Cyan, which provides a software-driven transport/switching
platform for network operators, raised $88 million by offering 8
million shares at $11, within its $10 to $12 range. At the $11
offer price, the company commands a fully diluted market cap of
$586 million and an enterprise value of $506 million. Cyan closed
its first day of trading at $11.14, up 1.3% from its IPO price.
TriState Capital, a branchless bank serving middle market
businesses in the northeast, raised $66 million on Wednesday by
offering 5.7 million shares (4% insider) at $11.50, the midpoint
of the $10.50 to $12.50 range. At the $11.50 offer price,
TriState commands a fully diluted market cap of $323 million.
TriState Capital, the best performing deal on the day, closed
trading at $12.59, 9.5% above its offer price.
PennyMac Financial Services, which originates, acquires and
services residential mortgage loans, priced its 11.1 million
share offering at $18, the midpoint of the $17 to $19 range. At
the offer price, the company commands a market cap of $1.4
billion and an enterprise value of $1.5 billion. PennyMac closed
at $19.10, 6.1% above its IPO price.
Busy day puts May on track for strong month for US
In addition to the seven IPOs that began trading on Thursday,
this week also saw the debut of REIT Armada Hoffler Properties
(AHH), bringing the total to eight IPOs so far this week. This is
the most pricings in a week since the week of October 8, 2012,
when nine IPOs hit the market, including Workday (WDAY, up
127.7%), Realogy (RLGY, up 90.2%), and Shutterstock (SSTK, up
166.8%). With several other deals on the calendar, this week
has a chance to surge into double digit pricings, potentially
making it the most active week since 2007. Less than two weeks
into May, there has already been 13 IPOs, which is tied with
April for the most in a month so far this year. At this pace, May
will not only become the strongest month for pricings this year,
but also could threaten to eclipse the 20 IPOs per
month barrier, which has only happened four times since
|Thursday's US IPOs (May 9, 2013)
||First Day Pop
||Internally managed REIT focused on leasing
single-family residential properties.
||Provides a software-driven transport/switching platform
for network operators.
Emerge Energy Services, LP
||Formed by Insight Equity to produce frac sand and
process transmix fuel.
||Originates, acquires and services residential mortgage
||World's largest CRO and provider of commercial
outsourcing services to biopharmas.
||Early-stage biotech developing treatments for relapsing
multiple sclerosis and inflammatory bowel disease.
||Branchless bank serving middle market businesses in the