Elanco Animal Health (ELAN) raised $1.5 billion and popped 50% on Thursday. The Eli Lilly spin-off had a better first-day return than any billion-dollar IPO since Twitter in 2013 (+73%). Higher than Snap in 2017 (+44%), Alibaba in 2014 (+36%), and close peer Zoetis in 2013 (+19%).
Over the last decade, 45 IPOs have raised $1 billion or more. Billion-dollar deals are more likely to trade up or flat than others, though the average first-day gain of +11% is also below the long-term IPO average of about 10-15%.
At $24, Elanco priced its offering at a solid discount to close peer Zoetis, which has enjoyed a 5-year run. Its valuation at IPO looked even better if it can bring up its margins, which are currently well below Zoetis. Below we show the 5 best-performing billion-dollar IPOs based on their first-day gain. At Elanco's first-day close of $36...
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