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The Heat is Gone

Perhaps we spoke too soon.

Two weeks ago, it looked like July was going to finish up with the year’s fourth week of seven-plus debuts. Unfortunately, only four of the expected seven IPOs made it to market last week, for a total of $1.1B.

Where did that leave the month as a whole? Last week’s shortfall has slowed what had been looking like some strong momentum – thanks to June’s strong latter half – as we head into the traditionally quiet month of August.

July ended up welcoming 16 issuers for $3.1B, almost half as many as this June’s 30 IPOs and last July, which also saw 30 IPOs – and for $8.9B, in one of 2014’s strongest months of proceeds, which, considering 2014’s record-setting performance, is saying something. And the news wasn’t all bad. Even with a late withdrawal (Mevion Medical Systems, which was expected to raise $69.0M), the Healthcare sector accounted for the majority of July’s new deals with seven ($1.0B), including two last week: NantKwest ($238.3M) and vTv Therapeutics ($117.2M), the sector’s 45th and 46th IPOs of 2015, respectively. Healthcare is not quite on last year’s blistering pace, but is holding up its end just fine.

The month’s largest deal came from Blue Buffalo Pet Products ($778.1M) of the Consumer Goods sector and doubled as the fifth-largest IPO of 2015 thus far, and the Industrials sector racked up its seventh IPO with Aqua Metals ($33.0M), a company engaged in lead recycling and not anything to do with Skynet.
But July could have been better. Last week’s TerraForm Global’s debut raised only half of its intended amount, preventing it from slotting in as the third-biggest IPO of the year. Also among the late withdrawals (due to market conditions) was RiverBanc Multifamily Investors, which was supposed to be the sixth REIT debut and would have pushed the sector ahead of last year’s REIT deal count. The deal is now expected to hit the markets this week.

Which brings us to August, typically a quiet, end-of-the-summer (already?!) month. It is currently expecting ten debuts. Healthcare (of course) leads the pack with three expected premieres and an average deal size of just $94.8M. Meanwhile SunRun ($250.6M), a solar energy provider, will be the third Utilities entrance of the year, while sports club Planet Fitness ($202.5M) hopes to ride the recent success of Fitbit’s June debut.

Additionally, the current 6-month backlog stands at 55 issuers seeking to raise $6.4B, well below the prior-year periods backlog of 84 issuers for $40.1B which was bolstered by Alibaba’s all-timer IPO.

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