February IPO Recap

The last few months have been strong ones for the IPO market, but it seems February was when the bottom fell out a little bit.

January brought 17 IPOs to the table, with proceeds topping every month’s total since Alibaba brought its windfall to September 2014, and coming on the heels of 2017’s 48 Q4 debuts, things were simply rocking in new issuance.

February threw a whole bunch of cold water on that party, unfortunately, as the second month of the new year brought a streak of three weeks without any IPOs. In fact, if next week continues the drought, it will mark the first four-week shutout since last year’s late summer swoon.

Let’s look at some specifics.

Only seven issuers made market debuts last month, for aggregate proceeds of $1.4B. The silver lining is that despite the big drop from January’s 17 debuts for $9.7B, February 2018 still topped February 2017’s 5 IPOs for $670.0M.

Energy led the sectors with both the most IPOs of the month (three) and the two largest, in Cactus, Inc. ($502.6M) and FTS International, Inc. ($403.7M). Technology (two), Financials (one) and Healthcare (one) split the last four debuts, and 2018 has yet to see any IPOs from Consumer Goods, Basic Materials, or Utilities.

Will any of those sectors breakout soon? Let’s look at the 6-month backlog:

The current 6 month IPO backlog stands at 21 issuers seeking to generate $4.9B in proceeds, which is the same deal count as compared to the prior-year period, but represents a marked dip in terms of proceeds from last year’s $8.0B. Consumer Services, Financials, and Healthcare are the current backlog leaders in terms of sector deal count, as each looks to bring four deals a piece to the market.

A few debuts from Consumer Goods do appear in the backlog list, which you can see in the full document: Ipreo IPO Brief February 2018