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October IPO Recap

Thus far in 2014, the new issuance market has been busier than a suburban neighborhood on Halloween night. Heading into October, there was no reason to expect things to slow down, especially since the month is typically quite active. Unfortunately, October did not live up to expectations.

October activity actually slowed from last year, pricing 26 IPOs ($6.1B), well below the year-ago period that saw $12.6B from 31 debuts. The largest IPO of the month came from Shell Midstream Partners, raising $1.1B and making it the largest MLP IPO of 2014. And I hate to keep beating this drum, but it’s still louder than everything else: the healthcare sector once again led the month in terms of deal count, with 9 deals raising $1.5B in proceeds, led by VWR’s $616.5M offering, with Energy riding Shell’s historic MLP to top October’s proceeds (42.3B in 5 deals).

Some historical data on October activity showcases why, in something of a banner year for new issuance deals, the month was a bit of a disappointment:

This October actually marks the 4th best October on record, going back to 2001 (on average, October has seen 16 deals price, taking home a combined average of $4.8B), but its 26 IPOs were a marked decrease from 2013′s 31 and something of a letdown after Alibaba, which was expected to open the floodgates. To keep a little perspective, 2008′s October saw zero IPOs hit the market, thanks to the collapse of Lehman Brothers and the onset of the global financial crisis. So maybe October 2014 wasn’t so frightening after all!

Either way, the season of fright is over, and November seems poised to pick up October’s slack. The backlog continues to grow, and is all the way up to 83 deals, which nearly triples the 31 deals in the pipeline as of this time last year, and the $15.5B in proceeds is almost double October 2013’s $8.9B. Why so many deals? Don’t get mad, but it’s healthcare again, which, despite the relatively small proceeds, keeps piling on IPOs, thanks to the exploding biotech market. In terms of the high dollar amount, you can thank REITs, which is expecting a Superman-sized jump of 633% in proceeds, with Paramount Group’s $2.6B deal leading the charge.

If the rest of 2014 has been any indication, by this time next month, we’ll have more than enough new issuance news to be thankful for.

For the full recap of October’s IPO Activity, visit Ipreo Ink.

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