The end of the first quarter was marked by another positive week in the IPO market, with four deals raising a total of $710 million. Citi's life insurance unit Primerica (PRI), which began trading today on the NYSE, led the group after pricing its upsized offering at $15, above its proposed $12-$14 range. It was only the third deal this year to price above the range, after last week's Maxlinear (MXL) (up 25%) and the previous week's Financial Engines (FNGN) (up 38%).
Primerica, which plans to cede 80% of its life insurance business to Citi, uses a direct sales force of roughly 100,000 licensed representatives to target middle income households and sells term life insurance, mutual funds, annuities and other investment products. The company raised $320 million by selling 21.4 million shares after initially planning to offer 18 million, representing a 37% boost in deal size. The stock jumped in morning trading as the company's consistent track record and attractive valuation generated interest among IPO investors, finishing 31% above its market price by the market close. Warburg Pincus provided an additional vote of confidence with its $230 million investment in a concurrent private placement.
Continuing this month's wave of tech IPOs, wireless LAN solutions provider Meru Networks (MERU) and financial services software firm SS&C Technologies (SSNC) both debuted on Wednesday, raising $66 million and $161 million, respectively. Both priced their IPOs at the top of a $13-$15 proposed range, with Meru selling 4.4 million shares and SS&C selling 10.7 million. However, though Meru's stock rose 28% in its debut as investors bet on a trend of increasing adoption of corporate wireless networks, SS&C remained relatively flat despite its healthy margins and strong fundamentals.
Newly formed shipping company Scorpio Tankers (STNG) was the laggard of the group. It priced 12.5 million shares at $13, below its $14-$16 range, and saw its stock drop -3.4% in its debut. It was the fourth shipping company to file for an IPO this month; Baltic Trading (BALT) and Crude Carriers (CRU) are down -2% and -9%, respectively, and Alma Maritime's (AAM) deal was postponed.
This month has shown a steady acceleration in both IPO volume and performance after a short pause in activity in mid-February. Out of the 14 IPOs that were completed this month, 6 posted double-digit returns and 3 made it to our list of the ten greatest first day "pops" in the last twelve months. Furthermore, the month saw 24 IPO filings submitted to the SEC, as compared with just 1 in March of 2008, indicating the recent uptick in IPO activity is likely to become a sustainable movement.
