April IPO Showers

March came in like a lion and went out like a lamb. Which is a good thing, weather-wise, but not so much when it comes to the new issuance market. Only 9 IPOs priced in March, raising a combined $1.5B in proceeds as deal volumes remained markedly lower year-over-year, as discussed in last week’s quarterly update.

Thus far, 2015 just hasn’t had the same pop as 2014. But April is looking to change that.
This week alone, 7 IPOs are on pace to raise $1.4B in what could be the second-busiest week of the year (on a volume basis). The year’s most robust period came in the last week of January, during which ten issuers raised $1.3B, including names like Shake Shack, and it seemed that 2014’s momentum was carrying over. The last two months have tossed cold water on that idea, but perhaps with spring will come an IPO renewal. A few sectors are certainly trying their best.

The Financials sector was March’s prime mover with four new issues raising $313.6M, including two banks and one BDC, and it continues to perform nearly up to last year’s standards, with two more coming this week – REIT National Storage Affiliates Trust ($230M) and Virtu Financial ($297.6M). That makes nine Financials IPOs already in 2015, just short of the 12 that landed in the same time period last year, and second only to healthcare’s 15 IPOs in 2015.

Don’t worry, the Ipreo Blog’s favorite sector is no easy mark, and it adds to its 2015 leading debut count, with the week’s two largest IPOs emerging from the Biotech and Pharmaceuticals space. Clinical-stage immune-oncology firm Aduro Biotech is the largest of the pair, hoping to take home $119.0M in its NASDAQ debut, while anti-infective developer Cidara Therapeutics expects to raise $60.0M on the NASDAQ as well. Should both successfully price, they will become the 10th and 11th premieres from the Biotech and Pharma space this year, the most among all mid-industries. As we remember (and this blog won’t let you forget), the space had a breakout year in 2014, bringing 77 new issues to market to the tune of $7.6B.

Making Tax Day more palatable for at least a handful of people are four companies slated to debut on April 15th, including online crafts purveyor Etsy, whose $250M expected debut could mark the second IPO out of Brooklyn on record. (The other Brooklynite to make its debut was Healthcare IT firm Everyday Health, which raised $100.1M in March of last year.) Party City, straight outta the retail sector, also arrives Wednesday, and hopes to raise $350M (in what could be the biggest debut of the week) while hoping to emulate the performance of its close peer Michaels, which has risen 60.9% since debuting last June.

The winter was a slow one for the new issuance market, but Spring seems to be thawing things a bit. Check back in two months to see if Summer brings the heat.