July IPO Recap

At the end of the second quarter, the IPO market was surging.

From our second quarter IPO Recap: “The last week of June was the busiest week of 2017 so far, as eight IPOs priced for $761.9M in total proceeds, helping make the second quarter the busiest quarter since 2015.”

The ball was in July’s hands. Did it fumble? Maybe not. But the month’s IPO market wasn’t exactly a touchdown. (Sorry, football’s almost here!)

After eight IPOs landed in June’s final week, eight IPOs landed in all of July for total proceeds of $942.1M, which was also a step back from last year’s seventh month, which saw 10 IPOs hit the market ($2.6B).

The month’s largest IPO was TPF RE Finance Trust, Inc., a REIT that debuted with $220.0M in proceeds, that sector’s first debut since June and 7th on the year (versus 2016’s one REIT IPO through July). Healthcare continued its surge, accounting for three of the month’s eight debuts, bringing its year-to-date tally up to 17 for $1.5B in proceeds, down from the sector’s 21 IPOs ($2.6B) at this time last year.

It’s enough to keep the sector atop the deal-count leader board even after a slow start to the year. Healthcare currently sits three IPOs ahead of the Tech sector, which mustered only two debuts in July, including the second-largest of the month, online real estate brokerage Redfin Corp. ($159.2M).

July’s loss of momentum is even more disappointing when you consider the fact that 2017 is now entering August, typically among the year’s slowest months for the IPO market (although amid a disappointing year, August 2016 was among the top five months with six IPOs). The summer slowdown is expected to take a toll, so it would have been nice if July could have staved it off just a bit. But where does the rest of the year stand?

Let’s take a look at the backlog, via the Ipreo Capital Markets July US IPO Brief:

The current 6-month backlog of 26 total IPOs, seeking combined proceeds of $6.1B, is comprised of 21 domestic IPOs and 5 international IPOs. The 21 US IPOs are expected to raise $4.4B, and the 5 international IPOs are seeking to raise $1.7B. The 26 expected IPOs represent a significant decline from the prior year, when there were 35 expected deals scheduled to generate $7.2B. There are three deals seeking to raise $500.0M or more, down slightly from the four deals seeking to raise $500.0M or more one year ago. Looking at proceeds amounts, the Consumer Services sector is still on top, as it expects to generate $2.7B, falling 8.6% from the $2.9B expected last year. In terms of deal count, the Energy sector is far ahead of all other sectors, as it expects to price nine deals for $1.7B, down slightly from 2016’s results of 10 deals for $1.7B. Every other sector is either down or breaking even with the 2016 year-to-date results in terms of deal count and pricing.

For a deeper dive into all of the quarter’s activity, including robust activity and performance statistics for US-Listed IPOs, click through to our July IPO Recap 2017.