The IPO Buzz: Best IPO Outlook in 7 Years

You have to reach back to 2005 to find more IPO activity in a year’s first two weeks, according to the U.S. Securities and Exchange Commission filings. Seven years ago, 25 companies did the same. And the 2005 calendar was to turn out 236 IPOs. That was 68.7 percent more IPO traffic than 2011’s 140.
Drilling into the IPO Time Table
Dating back over the last 10 years, the earliest pricing of an IPO was on Jan. 8, 2004. It was K-Sea Transportation Partners, when it offered 3.6 million common units at $23.50 each. The stock closed its opening day at $27.09, and was merged into Kirby Corp. (KEX) on March 13, 2011, for $8.15 per common unit in cash or $4.075 in cash plus 0.0734 of a share of Kirby.
The latest pricing of an IPO in a new year was on Feb. 10, 2009. It was Mead Johnson Nutrition (MJN), when it offered 30 million shares at $30 each. The stock closed its opening day at $26.43, and ended on Friday, Jan. 14, 2011, at $71.75, UP 139.2 percent from its initial offering price.
Most of the other first IPOs of the year over the last 10 years made their debuts in mid-January — like this week’s offering.
First IPO Baby of 2012
Renewable Energy Group plans to price 7.2 million shares at $13 to $15 each on Wednesday evening, Jan. 18, to trade on Thursday morning, Jan. 19.
The company expects to offer 6.9 million shares and selling shareholders expect to offer 300,000 shares. There will be 28.7 million outstanding shares of Common Stock and Class A Common Stock after the offering. The IPO is expected to
trade on the NASDAQ Global Market under the proposed symbol “REGI.” Joint-lead managers are UBS Investment Bank and Piper Jaffray, while the co-managers are Stifel Nicolaus Weisel and Canaccord Genuity.
Renewable Energy markets and distributes biodiesel to all segments of the petroleum-based distillate fuel supply chain. The company believes it is the largest producer of biodiesel in the United States, based on gallons produced. In 2011, Renewable Energy reported selling between 146 million and 148 million gallons of biodiesel, up from about 68 million gallons in 2011. That amounted to nearly 22 percent of the total biodiesel production sold in the United States last year.
Renewable Energy competes in the Basic Materials – Chemical Manufacturing Sector, which has outperformed the underlying market over the last month. The materials sector index was up 10.5 percent from Dec. 16, 2011, through Jan. 13, 2012, versus a 6 percent gain by the S&P 500 Index over the same time span.
Next week, two cloud computing companies have lined up to make their debuts. They are Guidewire Software (GWRE – proposed) and IntelePeer (PEER – proposed), but more on each later.
Stay tuned.
Disclosure: Neither the author nor anyone else on the staff has a position in any stocks mentioned, nor do they trade or invest in IPOs. The author and staff do not issue advice, recommendations or opinions.