The IPO market produced seven IPOs with gross proceeds of $1.22 billion in April, for the best monthly performance of 2016 as the IPO market slowly pulls itself out of the slumber that has persisted since mid-2015. Year-to-date, there have now been a total of 15 IPOs for gross proceeds of $1.89 billion.
The month saw the first non-life sciences company IPOs of the year with only one of April’s offerings coming from a life sciences company. Life sciences companies have accounted for nine of the year’s IPOs, or 60% of the total, compared to 47% of all IPOs in 2015 and 40% in 2014.
April also produced the first IPOs of the year by companies that did not qualify as emerging growth companies (EGCs). There were a pair of IPOs by non-EGCs in April. Over the first four months of the year, EGCs have accounted for 87% of all IPOs. In comparison, EGCs accounted for 93% of the total in 2015 and 85% of all IPOs in 2014.
The median IPO offering size over the first four months of 2016 was $95.0 million, up 4% from $91.7 million for all IPOs in 2015, but 6% below the $101.0 million figure for the five-year period preceding 2015.
The median annual revenue of IPO companies over the first four months of 2016 was $13.0 million, compared to $37.8 million for 2015 and $68.2 million for 2014.
Only one-third of IPO companies over the first four months of 2016 were profitable, up from the 30% of IPO companies in 2015, but below the 36% figure for 2014.
The average IPO over the first four months of 2016 produced a first-day gain of just over 2%, compared to an average first-day gain of 16% for all 2015 IPO companies.
At April month-end, the average 2016 IPO company was trading 14% above its offering price, with only one-third of the year’s IPOs trading below their offering prices.
IPO activity in April consisted of offerings by the following companies listed in the order they came to market:
- Aeglea BioTherapeutics, a biotechnology company committed to developing enzyme-based therapeutics in the field of amino acid metabolism that the company believes will transform the lives of patients with inborn errors of metabolism and cancer, priced below the range and ended its first day of trading down 2% from its offering price.
- Bats Global Markets, a leading global operator of securities exchanges and other electronic markets enabled by world-class technology, priced at the high end of the range and produced a first-day gain of 21%.
- American Renal Associates Holdings, the largest dialysis services provider in the United States focused exclusively on joint venture partnerships with physicians, priced within the range and ended its first trading day with a gain of 20%.
- SecureWorks, a leading global provider of intelligence-driven information security solutions exclusively focused on protecting the company's clients from cyber attacks, priced an IPO downsized by 11% below the range and was flat in first-day trading.
- Red Rock Resorts, a leading gaming, development and management company operating 21 strategically-located casino and entertainment properties, priced at the midpoint of the range and declined 4% from its offering price on its first trading day.
- Yintech Investment Holdings, the largest online provider of spot commodity trading services in China by customer trading volume in both 2014 and 2015, according to Euromonitor, priced at the midpoint of the range and ended its first day of trading flat.
- Global Water Resources, a water resource management company that owns, operates and manages water, wastewater and recycled water utilities in strategically-located communities, principally in metropolitan Phoenix, Arizona, priced an IPO upsized by 16% at the high end of the range and was flat in first-day trading.