For the third time in as many months, three deals debuted on the same day. The February trio, mortgage REIT Zais Financial (ZFC, -6.1% first day pop), LP New Source Energy (NSLP, -2.6%), and medical insurance provider Health Insurance Innovations (HIIQ, -2.1%), performed poorly on their first days of trading. The March group did not fare much better in their debuts, with communications company West Corp. (WSTC, -5.7%) and mortgage REIT Five Oaks Investment (FOIC, -3.3%) trading down, though on-demand ad management firm Marin Software (MRIN, 16.1%) attempted to redeem the group.
The April threesome, which debuted Thursday, of chemical producer Taminco (TAM), clean energy REIT Hannon Armstrong (HASI), and satellite services provider Intelsat (I) failed to escape the trend despite discounted pricing. All three companies priced well below the range. Taminco (-3.0%) and Hannon Armstrong (-8.8%) both fell, and though Intelsat (6.9%) opened below issue, it managed to end the day positive. Taminco priced its offering at $15, below the range of $18 to $20. Hannon Armstrong priced its shares at $12.50, below the $14 to $16 range. Intelsat priced its IPO at $18, below the $21 to $25 range, after downsizing the deal.
Larger deal sizes could not break the trend
The proceeds raised by the April trio stands out from the aforementioned deals. With the exception of West Corp, which raised $426 million, none of the other five deals from the groups in February and March raised proceeds greater than $105 million. Hannon Armstrong's $167 million deal size was the smallest of Thursday's deals, with Intelsat and Taminco raising $348 million and $237 million, respectively.
Intelsat and Taminco join West as LBO first day fallers
Intelsat and Taminco broke the trend of strong first day performances from LBO IPOs (average first day pop of 11.0%). Before Thursday, West Corp had been the only LBO IPO in 2013 to trade down on its first day. There have now been 11 private equity LBO IPOs, including standouts Bright Horizons (BFAM, 28.7% first day pop), Boise Cascade (BCC, 24.5%), and Fairway (FWM, 33.5%).
In what has been a volatile week for the stock market overall, it will be interesting to see what effect Thursday's IPOs have on the pricing of Blackhawk Network (HAWK) and SeaWorld Entertainment (SEAS). The pricing and trading of these two deals may signal whether Thurdsay's poor performance was an aberration from or an indication of the current health of the IPO market.
