All eyes were on Japanese messaging application LINE's (LN) highly anticipated debut this week; and it did not disappoint, popping 27% on its opening day. AdvancePierre Foods (APFH) raised $391 million and traded up 14% its first day, closing out an active week that began with five companies setting terms on Monday. With eight deals on the calendar and the VIX Volatility Index hovering in the low teens, July supports the gradual improvement of the IPO market.
LINE up: year's biggest tech IPO surges 27%
The popular Japanese messaging company raised $1.15 billion in a dual listing on the NYSE and Tokyo Stock Exchange. After Twilio (TWLO), LINE is the second company to price above its range. The company grew revenue by 39% to $1.18 billion in 2015 and currently holds the #1 market position in Japan with 61 million monthly active users. LINE represents the tenth successive tech IPO to trade positively, suggesting more technology plays could be on the way.
AdvancePierre advances: Oaktree-backed food supplier raises $391 million
Pricing below the midpoint, the leading US processor and distributor of ready-to-eat food traded up 14% on its market debut. Backed by Oaktree (sold 40% of the deal), AdvancePierre supplies its 3,000 customers (including 2016 IPO US Foods, USFD), with various frozen entrees, snacks and sandwich components. Operating in a stable, growing market, investors looking for yield may be attracted by AdvancePierre's 2.7% dividend.
Led by the former CEOs of Gillette and Hershey's, Conyers Park Acquisition (CPAAU), the seventh blank-check company of 2016, priced on Friday for an upsized $375 million, bringing this year's SPAC proceeds to $1.9 billion.
| IPO Pricings for the Week of July 11th, 2016 | |||||
| Issuer Business |
Deal Size ($mm) |
Market Cap ($mm) |
Price vs. midpoint |
First day return |
Return at 7/15 |
| LINE (LN) | $1,149 | $7,040 | +13% | +27% | +20% |
| Leading Japanese mobile messaging application being carved out of Naver. |
|||||
| AdvancePierre Foods (APFH) | $391 | $1,650 | -2% | +14% | 0% |
| Largest US supplier of ready-to-eat food to restaurants, retailers and schools. |
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Setting terms and taking names, six companies close in on their IPOs
This week, six companies joined the calendar, with four scheduled for the week ahead; two VC-backed tech, one large healthcare LBO, two biotech and one industrial. Silver-Lake backed Talend (TLND), a fast growing (+30%) cloud-based data integration platform provider, filed to raise $86 million. Impinj (PI), a leading maker of RFID tags with three years of profitability, is looking to raise $60 million. In the healthcare space, contract drug maker Patheon (PTHN; $625 million deal size) and biotechs Kadmon (KDMN; $100 million) and Audentes (BOLD; $75 million) continue the abundance of biotech IPOs. Wind blade manufacturer TPI Composites (TPIC) set terms for its $116 million IPO after seeing sales grow by 83% to $586 million in 2015.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index has outperformed the S&P 500 in the past month (+5% vs. +4%), though it has undperformed the S&P year-to-date (-4% vs. +6%). Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Alibaba (BABA), Synchrony Financial (SYF) and Citizens Financial Group (CFG). The Renaissance International IPO Index is currently lagging the ACWX on both a 1-month (+1% vs. +4%) and year-to-date (-4% vs. +1%) basis. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Recruit Holdings, NN Group and Aena S.A.
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