Eight IPOs are on this week’s calendar. They expect to raise over $1.9 billion. Yes, eight IPOs raising $1.9 billion! This is the biggest IPO calendar since October 2015 – and the best part about this week – a few deals are reportedly “in play.”
Revisiting October 2015
First, let’s look back to last fall. What was planned for the week of Oct. 12, 2015, and what got out the door were entirely different stories. That calendar had 10 IPOs looking to raise $5.4 billion, but only six were priced. The headliner was First Data (FDC), the payment processor, and it struggled. First Data had planned to offer 160 million shares at $18 to $20 to raise as much as $3.2 billion. It didn’t work at that level. The IPO had to be priced below range at $16 to raise $2.56 billion. First Data closed its opening day at $15.75, a broken deal.
Fast forward to spring. On Friday, May 20, 2016, First Data closed at $11.41 – DOWN 28.7 percent from its IPO price. Actually, First Data was the only real IPO that got priced during the week of Oct. 12, 2015. Many did not consider any of the other five pricings to be “IPOs.” Three were unit offerings. One was a “best efforts” offering and the stock of the week’s other “IPO” had been traded on the Norwegian Over-The-Counter System for years. The other four deals on the calendar were IPOs, but all were postponed.
In conclusion, the IPO calendar for the week of Oct. 12, 2015, can best be summarized as “wing flapping, no flying” – led by one giant deal that crashed on take-off.
Ready for May’s Finale
This brings us to the present with eight IPOs on tap for the final week of May 2016.
The outlook for this week is better than it was seven months ago, according to all reports. Three deals are already drawing early interest from investors: Cotiviti Holdings (COTV – proposed), GMS (GMS – proposed) and US Foods Holding (USFD – proposed).
Medical Claims Under the Microscope
Cotiviti Holdings, based in Atlanta, provides payment accuracy solutions primarily to the health-care sector. The company’s services are used by over 40 health-care organizations, including eight of the 10 largest U.S. commercial, Medicare and Medicaid managed health plans, as well as the Centers for Medicare and Medicaid Services. Cotiviti also provides payment accuracy solutions to over 40 retail clients, including eight of the 10 largest U.S. retailers.
For the three-month period ended March 31, 2016, Cotiviti reported net income of $8.1 million on revenue of $142.7 million versus net income of $4.2 million on revenue of $119.6 million for the same period a year ago.
Bankers plan to price 12.5 million shares at $17 to $19 each on Wednesday evening, May 25, to trade Thursday morning, May 26. The IPO is expected to raise about $225 million.
GMS, based in Tucker, Georgia, believes it is the leading North American distributor of wallboard and suspended ceilings systems. The company’s product lines consist of wallboard, suspended ceilings systems, ceilings and interior construction products for installation in commercial and residential buildings.
For the nine-month period ended Jan. 31, 2016, GMS reported net income of $2.95 million on revenue of $1.33 billion versus a net loss of $15.4 million on revenue of $1.17 billion for the same period a year ago.
Bankers plan to price 7 million shares at $21 to $23 each on Wednesday evening, May 25, to trade Thursday morning, May 26. The IPO is expected to raise about $145 million.
Feeding the Masses
US Foods Holding, based in Rosemont, Illinois, believes it is the second-largest foodservice provider in the U.S. The company supplies over 250,000 customer locations nationwide, including independently owned single and multi-unit restaurants, regional restaurant concepts, national restaurant chains, hospitals, nursing homes, hotels and motels, country clubs, government and military organizations, colleges and universities, and retail locations. The company provides over 400,000 fresh, frozen and dry food SKUs, as well as non-food items, sourced from over 5,000 suppliers.
For the 13-week period ended April 2, 2016, US Foods reported net income of $13 million on revenue of $5.59 billion versus net income of $7 million on revenue of $5.55 billion for the same period a year ago.
Bankers plan to price 44.4 million shares at $21 to $24 each on Wednesday evening, May 25, to trade Thursday morning, May 26. The IPO is expected to raise about $1 billion.
Work Hard, Play Hard
Passing point of interest: Five of this week’s eight IPOs are scheduled to be priced Wednesday evening to trade Thursday morning. No pricings are scheduled for Thursday evening. That way, bankers are free to take off Friday to get an early start on the Memorial Day holiday weekend. Sometimes it’s good to be a banker.
Looking into the shortened week of May 30, 2016, the IPO calendar has just one small-cap deal expecting to raise $10.9 million. But anything could happen on Monday, morning, May 23, 2016, to shape the agenda for the start of June.
Disclosure: Neither the author nor anyone else on the IPOScoop.com staff has a position in any stocks mentioned, nor do we trade or invest in IPOs. The author and IPOScoop.com staff do not issue advice, recommendations or opinion.