February IPO Recap

Recently, we’ve spent some time exploring the global markets, so today we thought we’d focus on new issuance in North America, with a look back at February’s IPO activity.

So far, 2015 is not quite matching 2014’s record pace. February saw only nine IPOs price, which is less than half of 2/2014’s numbers. Of course, those nine did include the largest MLP IPO on record, from Columbia Pipeline Partners ($1.2B), which out-performed both Antero’s and Shell’s MLPs from last fall, which were the two largest MLPs of 2014 (Shell’s reign was brief, lasting only a week before Antero trumped it), and previously the two largest MLPs of the decade. Not anymore!

Sector-wise, as usual, Healthcare was responsible for the lion’s share of the IPOs. Five of the month’s nine IPOs came from the space, including the eighth Healthcare IT IPO since 2012 in Inovalon Holdings ($684.4M), as well as February’s sole international offering, Nexvet Biopharma ($40M), from Ireland.

Not only was the number of debuts down, but, more significantly, those nine debuts averaged a first-day loss of 0.4%, and more than half of February’s IPOs recorded a loss or no change in their opening sessions. Biotech issuer Bellerophon Therapeutics fared the worst, dropping a whopping 25.3% on its first day, the fifth-largest opening day slide ever. Meanwhile, Columbia Pipeline Partners’ historic IPO even jumped 16.5% on day one and proving that investors continue to seek Energy plays, following an impressive 2014 for the sector.

Further indicating that 2015 won’t match last year, the current six-month backlog stands at 58 issues looking to raise $7.7B, down from 2014’s 68 for $15.0B during the same period. The primary bright spot? That surging Energy sector, which accounts for seven of the top 10 IPOs in the backlog, with Tallgrass Energy GP taking the top spot with expected proceeds of $862.5M.

For more details on February’s IPO activity, check out the monthly IPO Brief.