The IPO window has mostly shut, with the US IPO Index down 21% year-to-date and a string of postponements this month. Despite these challenges, 20 companies have submitted new IPO filings in January, more than 8 of the past 10 years. Of the new filers, 12 companies are planning to raise $100 million or more heading into February.
We expect most IPO candidates will wait for volatility to settle and reassess the market in mid-February, once they’ve prepared 4Q audited results. Even still, recent filers provide some clues into which types of companies could reopen the market. Profitability is once again key, and among the 12 issuers that filed to raise $100+ million, all 10 non-biotechs have positive EBITDA, and most generate cash flow.
Eyecare giant Bausch + Lomb (BLCO) and mattress retailer Mattress Firm (MFRM) are the largest January IPO filers. Both companies are leaders in their respective industries and have about $4 billion in trailing revenue, with solid margins and free cash flow in 2021.
The utilities and energy sectors have been underrepresented in the IPO market in recent years, but that may be about to change...
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