Rocket Fuel and FireEye had first-day returns (93% and 80%, respectively) to match their incendiary names last week, but neither could touch Benefitfocus's 102% first-day pop, just the tenth first-day double since 2000. The three represented the most 80%+ first-day gains seen in a single week since September 2000. The week's remaining five IPO pricings had more moderate results, with cancer biotech Acceleron (XLRN) rising 40% for the week and three others gaining less than 10%. A $1 billion deal was added to the docket by Empire State Realty Trust (ESRT), and six more companies, including Burlington Stores (BURL) and RE/MAX (RMAX) set terms to add to an already packed IPO calendar. The week's nine new filers featured 3D printing company voxeljet (VJET), a competitor of and licensor to ExOne (XONE), the third best performing IPO of 2013 (up 192%).
FireEye prices high, still jumps
FireEye's (FEYE) 80% gain on Friday came despite an IPO price of $20, 54% above the initially proposed range of $12 to $14. It was the wide disparity since Splunk's (SPLK) pricing in April 2012 (89% above the midpoint). Splunk too had a highly successful first-day, jumping 109%, and is now up 265% from its IPO price. In fact, of the 14 companies this year to price at least 15% above the midpoint, ten are now up more than 50% from their offer prices and five have more than doubled. FireEye's success was fueled by rapid growth in its IT security platform (108% in the second quarter) and by the willingness of investors to look past its prodigious spending (sales and marketing spending was 113% of second quarter sales).
| IPO pricings (week of September 16, 2013) | ||||
| Company (Ticker) | Business | Deal Size ($mm) | Price vs. Midpoint | Return |
| Rocket Fuel (FUEL) | Automated digital ad buying | $116 | 14% | 93% |
| Benefitfocus (BNFT) | Employee benefits software | $131 | 15% | 92% |
| FireEye (FEYE) | IT security software | $304 | 54% | 80% |
| Acceleron Pharma (XLRN) | Protein therapeutics | $84 | 7% | 40% |
| Volaris Aviation Holding (VLRS) | Low-cost Mexican airline | $346 | -8% | 15% |
| Five Prime Therapeutics (FPRX) | Protein therapeutics | $62 | 0% | 6% |
| ClubCorp Holdings (MYCC) | Golf and country clubs | $252 | -18% | 4% |
| BIND Therapeutics (BIND) | Targeted drug delivery | $71 | 0% | -6% |
Two $500+ million deals added to the calendar
The seven companies that filed terms last week brought the IPO calendar size to 17, which exceeds the 15 IPOs needed to make 2013 the most active year for IPOs since the recession (140 YTD vs. 154 in 2010). After Empire State's proposed $1.0 billion offering, the largest new deal last week was Premier, a national health care alliance that is looking to raise $690 million. Owned by 181 US hospitals, Premier provides supply chain services, software and advisory services to the health care industry.
| IPOs setting terms (week of September 16, 2013) | |||
| Company (Ticker) | Business | Deal Size ($mm) | LTM Sales ($mm) |
| Empire State Realty Trust (ESRT) | New York City REIT | $1,001 | $501 |
| Premier (PINC) | Health care supply chain services | $690 | $869 |
| RE/MAX Holdings (RMAX) | Real estate brokerages | $200 | $152 |
| Burlington Stores (BURL) | National off-price retailer | $200 | $4,348 |
| Violin Memory (VMEM) | Flash-based storage arrays | $162 | $95 |
| Enzymotec (ENZY) | Medical foods | $75 | $51 |
| LDR Holding (LDRH) | Spine surgery devices | $75 | $98 |
Sixth straight month to have 20 new filers
After nine companies filed last week, September became the sixth straight month to have 20 or more initial IPO filings (the high in 2012 was 18). Two of the largest new filers were oil and gas LPs Cheniere Energy Partners (CQH) and Valero Energy Partners (VLP). Like Rocket Fuel and other recent IPOs YuMe (YUME), Tremor Video (TRMR) and Marin Software (MRIN), new filer Criteo (CRTO) provides digital advertising technology. It operates in 37 countries and works with over 4,000 e-commerce brands.
| New IPO filers (week of September 16, 2013) | |||
| Company (Ticker) | Business | Deal Size ($mm) | LTM Sales ($mm) |
| Cheniere Energy Partners LP (CQH) | LNG regasification | $690 | $0 |
| CHC Group (CHCG.RC) | Helicopter operator | $400 | $1,743 |
| Valero Energy Partners (VLP) | Oil midstream assets | $345 | $93 |
| Essent Group (ESNT) | Mortgage insurance | $288 | $85 |
| Criteo (CRTO) | Display advertising | $190 | $471 |
| Avianca Holdings (AVH) | Latin American airline | $100 | $4,414 |
| voxeljet (VJET) | 3D printers | $100 | $11 |
| Veracyte (VCYT) | Thyroid cancer diagnostics | $75 | $17 |
| Aerie Pharmaceuticals (AERI) | Eye disease biotech | $58 | $0 |
IPO market snapshot
The 140 IPOs in 2013 have raised $29.9 billion and produced an average return of 35%. There have been 58 IPOs in the past 90 days, with total proceeds of $11.2 billion and an average return of 29%. The active IPO pipeline includes 117 companies looking to raise $35.3 billion.
