May IPO Recap

Even in the face of what has been a resoundingly disappointing first half of 2016, at least in comparison to recent history, we always attempt to find the silver lining. Our monthly and quarterly recaps continually point towards whatever signs of life the new issuance market has seen over that period and hope it’s an indication of things to come.

It hasn’t been easy so far this year, and it’s clear that 2016 will never match the numbers we saw in 2015 and 2014. But Spring has seen some incremental upticks in both volume of IPOs and in the size of the proceeds, and we’ve kept hope alive. Today, we look back at May’s new issuance market, and rejoice. Hope floats!

Coming off a struggling first four months that saw a meager 13 new issuers debut, the month of May marked a notable jump as 12 IPOs priced for total proceeds of $2.6B. US Foods Holding Corp. from the Consumer Services sector generated an impressive $1.2B in proceeds for the month and landed as the second largest deal of the year, trailing just behind the debut of MGM Growth Properties LLC from the REIT sector last month. It’s actually the biggest deal from the Consumer Services space since September 2014’s enormous Alibaba IPO, which landed just as this blog was making its debut.

Unfortunately, it’s not all good news! Despite almost doubling in deal count compared to April, the month saw five fewer deals than the prior year and a decrease of 42.1% in terms of proceeds. Additionally, the current 6-month backlog consists of 29 issuers looking to raise $2.7B, falling sharply from last year’s 49 issuers seeking to raise $8.6B. Unsurprisingly, Healthcare continues to lead in deal count, while REIT was the only sector that managed to pull a year-over-year increase in backlog total, now accounting for two deals.

We are still awaiting our first deals in the Basic Materials, Energy, Industrials, and Utilities sectors, although Industrials looks to break through in June with Atkore International Group Inc. on the horizon.

Read the entire May IPO Brief