There were seven US IPOs last week, including two by small health care companies that traded up more than 30%. Antero Resources (AR) raised $1.6 billion in the largest E&P IPO in a decade, just two days after midstream energy company Plains GP Holdings, LP (PAGP) launched an even bigger $3.0 billion IPO. The number of initial IPO filings for the year broke 200 as 13 new filings were submitted, the highest weekly total since April 2011.
Antero Resources upsizes IPO and trades well
Antero Resources, an E&P operating in the Marcellus Shale and the Utica Shale, offered extra shares and priced two dollars above its proposed range, raising close to a third more than expected. It was the second largest IPO of the year after Zoetis' $2.2 billion deal and the largest E&P IPO since 1998. The company's fast growth (production was up 121% in the second quarter) and experienced management team (the founders sold XTO in 2005 for $1.0 billion) helped the stock rise 21%.
Two health care companies, MacroGenics (MGNX) and LDR Holding (LDRH), had the best performing deals of the week. MacroGenics is developing a potential replacement for Herceptin, which had sales of $6.1 billion in 2012, and has collaborations with Servier, Gilead, Boehringer and Pfizer. LDR sells spine implants and targets the fast-growing market for cervical disc replacement.
| IPO pricings (week of October 7, 2013) | ||||
| Company (Ticker) | Business | Deal Size ($mm) | Price vs. Midpoint | Return as of 10/11 |
| MacroGenics (MGNX) | Targeted cancer therapies | $80 | 7% | 63% |
| LDR Holding (LDRH) | Spine surgery implants | $75 | 0% | 33% |
| Antero Resources (AR) | Natural gas and oil E&P | $1,572 | 10% | 21% |
| Stonegate Mortgage (SGM) | Residential mortgage loans | $114 | -24% | 15% |
| Western Refining Logistics, LP (WNRL) | Midstream energy assets | $303 | 10% | 10% |
| QTS Realty Trust (QTS) | Data center REIT | $257 | -26% | 4% |
| SFX Entertainment (SFXE) | Electronic music events | $260 | 8% | -8% |
Plains GP Holdings, LP launches $3 billion IPO
Plains GP Holdings, LP (PAGP) is set to become the largest IPO of the year with a proposed $3.0 billion IPO. The LP will own interests in Plains All American Pipeline LP (NYSE: PAA), one of the largest midstream crude oil companies in North America. It previously filed for an IPO in August 2007 but withdrew in early 2008.
Endurance International (EIGI), which provides web hosting and domain services to individuals and small businesses, set terms for a $351 million IPO. The company was acquired by Warburg Pincus and Goldman Sachs in 2011 for $975 million. In the first half, sales increased 173% to $251 million as the number of subscribers rose to 3.4 million. Also acquired in 2011, CommScope (COMM) set terms for a $750 million IPO. The broadband infrastructure company was taken private by The Carlyle Group for $3.9 billion.
German 3D printing company voxeljet (VJET) launched a $91 million IPO. Its primary competitor, ExOne (XONE), is the best-performing IPO so far this year (up 187%) among non-health care companies.
| IPOs setting terms (week of October 7, 2013) | |||
| Company (Ticker) | Business | Deal Size ($mm) | LTM Sales ($mm) |
| Plains GP Holdings, LP (PAGP) | Midstream energy assets | $3,008 | $39,708 |
| CommScope (COMM) | Broadband infrastructure | $750 | $3,488 |
| Endurance International Group Holdings (EIGI) | Web hosting | $351 | $451 |
| Springleaf Holdings (LEAF) | Consumer loans | $320 | $859 |
| Criteo (CRTO) | Display advertising | $176 | $471 |
| voxeljet (VJET) | 3D printing | $91 | $12 |
Most new filings in two years
The 13 initial filings last week were the most since the week of April 18, 2011. Six came from health care companies with less than $15 million in annual sales. E-commerce site zulily (ZU), which filed for a $100 million IPO, offers daily deals on apparel for moms, babies and kids. Sales grew 114% to $272 million in the first half, and active customers nearly doubled to 2.2 million. The company was founded and is led by former executives of Blue Nile, including Blue Nile's founder and long-time CEO.
| New IPO filers (week of October 7, 2013) | |||
| Company (Ticker) | Business | Deal Size ($mm) | LTM Sales ($mm) |
| JGWPT Holdings (JGW) | Purchases payment streams | $200 | $484 |
| Dynagas LNG Partners LP (DLNG) | LNG carriers | $150 | $83 |
| zulily (ZU) | Family apparel | $100 | $476 |
| Norcraft Companies (NCFT) | Home cabinetry | $100 | $313 |
| Tandem Diabetes Care (TNDM) | Insulin delivery devices | $100 | $13 |
| Blue Capital Reinsurance Holdings (BCRH) | Catastrophe reinsurance | $100 | $0 |
| CardioDx (CDX) | Cardiovascular diagnostics | $86 | $5 |
| Trevena (TRVN) | Heart failure treatments | $86 | $1 |
| Celladon (CLDN) | Heart disease therapies | $86 | $0 |
| Vital Therapies (VTL) | Liver failure treatments | $86 | $0 |
| Xencor (XNCR) | Cancer treatments | $69 | $0 |
| NMI Holdings (NMIH) | Private mortgage insurance | $25 | $2 |
| Sysorex Global Holdings (SYRX.RC) | IT infrastructure | $20 | $22 |
IPO market snapshot
The 165 IPOs in 2013 have raised $36.5 billion and produced an average return of 35%. There have been 73 IPOs in the past 90 days, with total proceeds of $15.9 billion and an average return of 24%. The active IPO pipeline includes 123 companies looking to raise a total of $38.0 billion.
