The IPO Buzz: December’s Billion-Dollar Baby

The IPO market is expecting a billion-dollar baby during the first full week of December. Athene Holding Ltd. (ATH – proposed) is attracting attention on Wall Street and beyond. Based in Bermuda, Athene is in the business of selling fixed annuities, insurance and other retirement savings products and services.

The size of Athene’s IPO is estimated at $950 million – nearly a billion dollars and a talking point in today’s market. The deal is set for pricing Thursday night, Dec. 8, to start trading Friday, Dec. 9, on the New York Stock Exchange. Bankers plan to offer 23.8 million Class A common shares of Athene at $38 to $42 a share.

The company is backed by Apollo Global Management LLC, a New York-based private equity firm. After the IPO, the Apollo Group is expected to continue to control 45 percent of the voting power of Athene Holding Ltd., the prospectus says.

Cranking Out the Chips

The second name to generate conversation this week among IPO players is Ichor Holdings Ltd. (ICHR – proposed) and like Athene, it’s scheduled for pricing on Thursday, Dec. 8. The stock is expected to trade Friday, Dec. 9, on the NASDAQ.  The company is registered in the Cayman Islands and headquartered in Fremont, California. Bankers plan to offer 5.8 million ordinary shares at $12 to $14 a share to raise an estimated $74.8 million, based on the mid-point of that price range.

Ichor isn’t a household name, of course, unless your household is obsessed with the business of making semiconductor chips. The company describes itself as “a leader in the design, engineering and manufacturing of critical fluid delivery subsystems for semiconductor capital equipment,” according to the prospectus.  These subsystems “ensure accurate measurement and uniform delivery of specialty gases and chemicals at critical steps in the semiconductor manufacturing process,” the prospectus says.

Applied Materials, Inc., one of the largest chip equipment makers, is one of Ichor’s largest customers.

Connecting the Dots

This week’s IPO Calendar consists of six deals likely to raise about $1.3 billion. Athene, of course, is responsible for the lion’s share of that estimated volume.

This traffic – notable by 2016’s standards – comes against the backdrop of a healthy U.S. economy and a stock market that rallied to record highs after the election. On Friday, the Labor Department reported that the U.S. unemployment rate fell in November to 4.6 percent – the lowest level since August 2007.

The Wall Street Journal pointed out that Donald J. Trump will inherit one of the lowest U.S. jobless rates of any president since World War II – compared with 6.8 percent when Barack Obama was elected in 2008, in the midst of the financial crisis and the Great Recession, and 3.9 percent in 2000, when George W. Bush was elected.

It’s a fact of life: You can’t have a healthy IPO market without warm trade winds from the U.S. stock market. Although Friday’s close marked a slight pullback by the major U.S. stock indexes from their recent peaks, the perception is that the stock market is signaling strength ahead in the U.S. economy.

WildHorse in the Wings

So far, only one name is on the IPO Calendar for the week of Dec. 12: WildHorse Resource Development (WRD – proposed). It’s a Houston-based oil and gas company with assets in Texas and Louisiana.

But the IPO market’s dance card could expand when the U.S. Securities and Exchange Commission’s filing window opens for business on Monday morning.

Stay tuned.


Disclosure: Neither the author nor anyone else on the staff has a position in any stocks mentioned, nor do we trade or invest in IPOs. The author and staff do not issue advice, recommendations or opinion