After the prior week's 9 US IPO pricings cleared the calendar, a batch of five new IPOs set terms to keep the US IPO calendar rolling last week. Three of the new deals were energy-related yield plays, a subset of the IPO market that has produced 6 deals since May, generating an average 25% return. One of these, Seadrill Partners (SDLP), priced after an accelerated 4-day roadshow and gained 11% in its first day of trading. Seadrill Partners owns 4 offshore rigs and was carved out of Seadrill, a $19 billion offshore global drilling enterprise. WhiteWave Foods (WWAV), which owns brands such as Horizon Organic milk, Silk and International Delight coffee creamers, set terms for a $300 million deal. A fourth energy company, Texas-based Energy & Exploration (ENXP), set terms for a $236 million IPO but did not officially launch.
YY looks to become first US IPO from China since March
The lone initial US IPO filing of the week came from social platform YY Inc. (YY). The Guangzhou-based company, which filed confidentially in July and might move forward quickly, could be just the second US IPO from China in the past year and the first since flash sales website operator Vipshop Holdings (VIPS) went public in March. Although Vipshop has recovered strongly from poor early trading (after plummeting -33% in its first week, it is now up 53% from its IPO price), only one of twelve China-based US IPOs from 2011 is trading above its offer price. Accounting scandals and litigation have made investors cautious on emerging-market IPOs, as seen in the recent IPO from Indian rice maker Amira Nature Foods (ANFI), which priced 29% below its proposed range and has lost 21% since its October 9 debut.
Several European IPOs added to the global calendar
Europe has only seen 10 IPOs year-to-date, but a few large deals are expected to price in the coming weeks. ZE PAK, a Polish power utility company, is expected to raise $241 million and list on the Warsaw Stock Exchange. Telefonica Deutschland Holdings, a spinoff of the Spanish telecommunications company's German and Latin American assets, is looking to list on the Frankfurt Stock Exchange in a $1.7 billion deal. Finally, MegaFon, Russia's second largest mobile phone operator, could raise $2 billion when it lists on the London Stock Exchange later this year.
Other regions are also showing signs of renewed activity, with deals launching in Hong Kong (Fosun Pharmaceutical), Mexico (Cemex Latam) and South Korea (CJ Hellovision).
US IPO pipeline update
With official US filing activity remaining slow, the US IPO pipeline fell again this week. It now holds 131 companies looking to raise an estimated $39.4 billion. Of these, 50 companies have updated their filings within the past 90 days. Companies updating S-1s last week and expected to launch in the coming weeks include Wi-Fi system provider Ruckus Wireless (RKUS), high-end home furnishings retailer Restoration Hardware (RH) and oil LP Delek Logistics Partners (DKL).
US IPO market performance update
In the past 90 days, the average total return for US IPOs is 20% and the average aftermarket return is 8%. Of the 37 deals in this period, 31 (84%) are trading above their offer prices. Year to date, the average total return has been 19% and the average aftermarket return has been 5%. There have been 115 deals in 2012, 17% more than at this point last year, and the total proceeds of $39.6 billion are up 35% year-over-year.
