Three IPOs priced this week. The two REITs and a housing play all either offered fewer shares or priced below the range. Clipper Realty (CLPR), Sachem Capital (SACH) and Foundation Building Materials (FBM) all had neutral or positive returns after their disappointing pricings. Mauser Group (MSR) was set to be the biggest deal of the week with a $265 million IPO, but was acquired for $2.3 billion by PE firm Stone Canyon, via its North American industrial packaging subsidiary BWAY. Vaccine biotech Visterra (VIST) also withdrew its filing, making it the second biotech with heavy insider buying that could not get a deal done in recent weeks, however the two best performing IPOs of the year are also biotechs. CBS Radio (CBSR) officially withdrew after merging with Entercom.
In an active week, six filings replaced the six pricings and withdrawals in the pipeline. Two fracking companies hope to capitalize on the new administration’s stance on the industry, ProPetro (PUMP) and FTS International (FTSI). Four companies refiled after previously withdrawing filings, Brazilian airline Azul (AZUL.RC), insulin device maker Valeritas (VLRX) and flooring retailer Floor & Décor (FND) joined FTS, and women’s apparel retailer J. Jill (JILL) filed on Friday, planning a return to the public market.
| 3 IPOs Priced During the Week of February 6, 2017 | |||||
| Issuer Business |
Deal Size ($mm) |
IPO Market Cap ($mm) |
Price vs. midpoint |
First day return |
Return at 2/10 |
| Foundation Building Materials (FBM) |
$179 | $599 | -22% | +11% | +15% |
| North American distributor of wallboard and ceiling systems. |
|||||
| Clipper Realty (CLPR) | $77 | $592 | -7% | 0% | 0% |
| REIT focused on multi-family and commercial properties in NYC. |
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| Sachem Capital (SACH) | $13 | $56 | 0% | 1% | 1% |
| Mortgage REIT focused on short-term loans secured by property in Connecticut. |
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Downsizing: Foundation Building Materials prices IPO well below the range
Foundation Building Materials (FBM), a wallboard distributor, raised $179 million by pricing 12.8 million shares well below the range at $14. It closed Friday up 11% at $15.50, still below the original ($17-$19) range. Foundation is one of two top consolidators in its industry and commands a top three market position.
Snipped! Clipper prices downsized IPO at low end
Clipper Realty (CLPR), a NYC REIT, priced its $77 million IPO at the $13.50 low end after cutting its offering to 5.7 million shares from 7.1 million. It opened Friday at $15, but closed down at its offering price. Clipper plans on adding to its Brooklyn portfolio with the proceeds of the offering.
Sachem Capital (SACH), a micro-cap REIT, priced a downsized $13 million IPO at $5. Sachem holds a portfolio of small mortgages in Connecticut.
IPO Pipeline
In an active week for amendments Snap (SNAP) led the headlines once again, announcing an agreement to spend $1 billion with Amazon Web Services for hosting services in addition to the $2 billion it already has committed to Google. Global aircraft lessor Intrepid Airlines (INTR) and drone maker Mota Group (MOTA) updated financials ahead of IPOs. BeyondSpring (BYSI), a biotech developing cancer therapies, added underwriters in its latest filing amendment.
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is up 6.5% year-to-date, while the S&P 500 is up 3.5%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include First Data (FDC) and TransUnion (TRU). The Renaissance International IPO Index is up 4.7% year-to-date, while the ACWX is up 5.1%. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Aena and ABN Amro. To find out if this is the best ETF for you, visit our IPO Investing page.
