Twitter entered the final stages of its long-awaited offering, setting up what will likely be a pre-Thanksgiving debut, and sandwich shop chain Potbelly posted the second-best first-day return of the year in an eventful week for US IPOs. Consumer retailer Burlington Stores (BURL) rode a compelling turnaround story to a 52% gain. Empire State Realty Trust's (ESRT) contentious IPO fell just shy of the $1 billion deal size mark and ticked up less than 1% in its debut. And Warburg Pincus-backed Antero Resources (AR) launched the largest US E&P IPO in at least a decade, seeking $1.2 billion. Filing activity also remained high, with ten pipeline entrants looking to raise $2.5 billion combined. Last month wrapped up with 21 IPO pricings and 31 initial IPO filings, both post-tech bubble records for September.
Potbelly turns in the fourth first-day double of 2013
With fervent followings in Chicago and Washington D.C. and a blueprint for rapid expansion, Potbelly (PBPB) gained 120% on its first day of trading Friday. The sandwich shop operator was the fourth company of the year to double in price on its first day, joining natural grocer Sprouts (124%), fellow fast-casual restaurant Noodles (104%, now up 142%) and enterprise software provider Benefitfocus (102%). Burlington Stores (BURL), an off-price retailer coming off 8% same-store sales growth in the second quarter, was the latest success for Bain Capital. The private equity firm, which acquired Burlington in a 2006 LBO, has led well-received consumer IPOs in three consecutive years now, following Dunkin' Brands' July 2011 IPO and Bloomin' Brands' August 2012 offering. Empire State Realty Trust (ESRT), which owns 18 commercial properties in the greater New York City area, completed the largest deal of the week but gained only 1%.
| IPO pricings (week of September 30, 2013) | ||||
| Company (Ticker) | Business | Deal Size ($mm) | Price vs. Midpoint | Return |
| Potbelly (PBPB) | Sandwich shops | $105 | 40% | 120% |
| Burlington Stores (BURL) | Off-price retailer | $227 | 13% | 52% |
| RE/MAX Holdings (RMAX) | Real estate brokerages | $220 | 10% | 44% |
| Fate Therapeutics (FATE) | Stem cell treatments | $40 | -60% | 19% |
| OCI Partners LP (OCIP) | Methanol and ammonia production | $315 | -10% | 4% |
| Empire State Realty Trust (ESRT) | NYC commercial properties | $930 | -7% | 1% |
| Cherry Hill Mortgage Investment (CHMI) | Mortgage REIT | $130 | 0% | -8% |
Antero Resources launches $1.2 billion IPO
The largest of five companies to set terms last week, Antero Resources (AR) has quickly become a major player in natural gas drilling. Warburg Pincus, Yorktown and Trilantic have invested nearly $2 billion, helping the E&P grow production by 121% in the second quarter. Veeva Systems (VEEV), which develops cloud-based software solutions for the life sciences industry, launched a $170 million IPO. The software helps customers, including Bayer, Merck and Novartis, track drug information and improve their sales and marketing.
| IPOs setting terms (week of September 30, 2013) | |||
| Company (Ticker) | Business | Deal Size ($mm) | LTM Sales ($mm) |
| Antero Resources (AR) | Natural gas E&P | $1,200 | $644 |
| Western Refining Logistics, LP (WNRL) | Midstream LP | $250 | $102 |
| Stonegate Mortgage (SGM) | Residential mortgage loans | $181 | $149 |
| Veeva Systems (VEEV) | Life sciences industry software | $170 | $168 |
| MacroGenics (MGNX) | Cancer biotech | $60 | $49 |
Twitter unveils most anticipated #IPO of the year
Twitter (TWTR) set off a flurry of analysis, much of it on its widely used microblogging platform, by making its first public IPO filing on Thursday. Given the required 21 days between first publicly filing (Twitter first confidentially filed on July 12) and launching a roadshow, the social networking giant could be preparing for a pre-Thanksgiving offering, a year earlier than many expected. Monthly active users reached 218 million in the second quarter, and first-half revenue grew 107% to $253 million, nearly two-thirds of which came from mobile ads.
Nine other companies made initial filings during the week. The Container Store (TCS), which was acquired by Leonard Green & Partners in 2007, operates 61 stores in 22 states and is the only national retailer devoted to storage and organization. Barracuda Networks (CUDA), backed by Francisco Partners and Sequoia Capital, has provided easy-to-use security, spam-filtering and storage systems to 150,000 customers in 100 countries. Wix.com (WIX) has 37 million registered users on its web development platform.
| New IPO filers (week of September 30, 2013) | |||
| Company (Ticker) | Business | Deal Size ($mm) | LTM Sales ($mm) |
| Twitter (TWTR) | Social networking | $1,000 | $448 |
| Abengoa* (ABGB) | Global clean tech | $621 | $9,198 |
| The Container Store Group (TCS) | Organization products | $200 | $736 |
| Qunar Cayman Islands (QUNR) | Hotel and travel comparison site | $125 | $107 |
| Barracuda Networks (CUDA) | Computer security and storage systems | $100 | $218 |
| Wix.com (WIX) | Web development platform | $100 | $59 |
| Arc Logistics Partners LP (ARCX) | Logisitcs LP | $100 | $34 |
| Mavenir Systems (MVNR) | Telecommunications networking | $86 | $82 |
| GlycoMimetics (GLYC) | Orphan disease biotech | $86 | $12 |
| Karyopharm Therapeutics (KPTI) | Cancer biotech | $80 | $0 |
IPO market snapshot
The 158 IPOs in 2013 have raised $33.8 billion and produced an average return of 39%. There have been 66 IPOs in the past 90 days, with total proceeds of $13.2 billion and an average return of 29%. The active IPO pipeline includes 117 companies looking to raise $37.1 billion.
