Four US IPOs raised $1.2 billion this past week, driven by the year's third-largest IPO, Athene Holding. The door has now closed for new 2016 IPO launches, and the year's final week of offerings is upon us. Volatility hit a 90-day low while markets continued to notch all-time highs: The S&P 500 gained 3.1% this week while the Renaissance IPO Index was up 3.7%.
| 4 IPOs Priced During the Week of December 2nd, 2016 | |||||
| Issuer Business |
Deal Size ($mm) |
IPO Market Cap ($mm) |
Price vs. midpoint |
First day return |
Return at 12/9 |
| Polar Power (POLA) |
$17 | $68 | -7% | +29% | +27% |
| Manufactures DC power generators for off-grid commercial applications. |
|||||
| Athene Holding (ATH) | $1,080 | $7,803 | 0% | +10% | +10% |
| Apollo-backed provider of fixed annuities with $87 billion in assets. |
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| Ichor Holding (ICHR) | $52 | $216 | -31% | +9% | +9% |
| Provides fluid delivery subsystems for semiconductor capital equipment OEMs. |
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| SenesTech (SNES) | $15 | $91 | -39% | +2% | +1% |
| Commercializing a non-lethal rodent control chemical that lowers rat fertility. |
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A wise investment: Year's 3rd-largest IPO pops 12%
Athene Holding (ATH) raised $1.1 billion for selling shareholders, making it the year's third-largest offering and the fifth to raise over $1 billion. One of Apollo Global's (NYSE: APO) largest holdings, the provider of fixed annuities offered additional shares at the $40 midpoint and traded up 10% on its Friday debut. While Athene does not offer a dividend and pursues an aggressive investment strategy vulnerable to downturns, investors were likely drawn to its potential for outsized earnings growth in the coming years, amid a broader-sector rally related to a more favorable rate and regulatory environment.
A fluid motion: Ichor prices down and trades up 9%
Ichor Holdings (ICHR) priced its $53 million IPO at $9 per share, well below the $13 midpoint. IPO investors demanded a steep discount to publicly-traded peer Ultra Clean, and the stock gained 9% on Friday. Owned by Francisco Partners, Ichor provides critical fluid delivery equipment to large semiconductor OEMs. Ichor faces high customer concentration in a cyclical industry, but also brings a relatively strong 15% organic growth and a history of profitability.
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2 management-owned micro-caps
Polar Power (POLA), which sells gas-powered DC generators for off-grid telecom towers, raised $17 million and finished the week with a 27% gain. SenesTech (SNES), which is beginning to commercialize a chemical used to lower rodent fertility, raised $15 million by pricing at $8, a steep discount to its original target. It finished the week up almost 1% at $8.05.
IPO Pipeline shrinks: 4 pricings, 3 withdrawals, 2 acquisitions but just 1 new filer
The US IPO pipeline contains 67 companies on file for an estimated $19 billion in proceeds Only one new IPO filing came this week - not unusual with the holidays approaching - as beef producer JBS Foods (JBS) filed for an estimated $2.5 billion that could come in the 1Q17. One SPAC filed: Gores Holdings II (GORSU.RC) plans to raise $375 million and duplicate the success of its previous SPAC which acquired Hostess.
This past week, five companies withdrew IPO filings or were acquired. Withdrawals came in for Apax Partners' LBO'd wound care provider Acelity Holdings (ACEL.RC; est. $1 billion deal size), Google Capital-backed networking company InnoLight Technology (INLT) and German semiconductor company congatec (CONG). On the M&A side, Chinese conglomerate Fosun sold Bermuda-based insurer Ironshore (IRSH.RC) while Blackstone's (NYSE: BX) security services provider Optiv (OPTV) was acquired by KKR (NYSE: KKR) after filing for an IPO just last month.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is up 2% year-to-date, while the S&P 500 is up almost 11%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Citizens Financial Group (CFG) and Alibaba (BABA). The Renaissance International IPO Index is down 6% year-to-date, while the ACWX is up 4%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Recruit Holdings and Samsung C&T. To find out if this is the best ETF for you, visit our IPO Investing page.
