The IPO Buzz: Thriving in a Cold Spring

Sell in May and go away” is an old Wall Street proverb that was on target for this May’s first two weeks. By Friday’s closing bell, the three major U.S. stock market indexes were down for the month. Strangely, against those chilly spring winds, the IPO market showed signs of life last week.

Three bright spots made it a week to remember. Two deals – both non-bio IPOs – got priced and popped in the aftermarket. Next: The U.S. Securities and Exchange Commission chipped in with information on another pending offering. It was an anxiously awaited IPO that posted its pricing terms to raise a whopping $1 billion.

The Pricings

Acacia Communications (ACIA) is a manufacturer of high-speed optical interconnection products for communications networks. It priced its IPO of 4.5 million shares at $23 each Thursday evening. Acacia closed Friday, its opening day, at $30.95, UP 34.6 percent from its IPO price.

SiteOne Landscape Supply (SITE) is the largest and only national wholesale distributor of landscape supplies in the United States and Canada. It priced its IPO of 10 million shares at $21 each Wednesday evening. On Friday, SiteOne closed at $28.20, UP 34.3 percent from its IPO price.

The Posting

US Foods Holding (USFD – proposed) filed to offer 44.4 million shares at $21 to $24 each to raise $1 billion. The 163-year old company is a foodservice distributor. US Foods Holding supplies over 250,000 customer locations nationwide with over 400,000 fresh, frozen and dry food stock-keeping units, as well as non-food items, sourced from over 5,000 suppliers. Its customers include 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 IPO is expected to be priced Wednesday evening, May 25, 2016, to trade Thursday, May 26.

Money and Medicine

That brings us to this week and its calendar of five IPOs. Two are small-cap offerings aiming to raise between $22 million and $25 million; one is a “blank check” company expecting to raise $600 million; another is an Argentinian bank, and then there’s a bio-IPO from The Netherlands. Let’s take a look at the last two.

They are Grupo Supervielle S.A. (SUPV – proposed) and Merus B.V.(MRUS – proposed).

Grupo Supervielle, based in Argentina, is a family-owned financial services company that owns one of the country’s largest commercial banks. The company offers credit, depository and financial services to customers throughout Bueno Aires.

The Supervielle family has been active in Argentine banking since 1887.

Bankers plan to price 20.83 million American Depositary Shares (ADS) at US$11 to US$13 each on Thursday evening, May 19, to trade on Friday morning, May 20. The bank is offering about 16.7 million ADS and selling shareholders are offering about 4.2 million ADS.

Merus B.V., based in The Netherlands, is a clinical-stage immuno-oncology company developing innovative bispecific antibody therapeutics. The company has a pipeline of full-length human bispecific antibody candidates, which it calls Biclonics and which are generated from its technology platform. By binding to two different targets, Biclonics can be designed to simultaneously block receptors that drive tumor cell growth and survival, and mobilize the patient’s immune response by activating various killer cells to eradicate tumors.

Certain unidentified existing investors have indicated an interest in buying up to $32.5 million worth of common stock in this IPO. Among the principal shareholders are entities of Novartis, Johnson & Johnson, Pfizer, Novo and others.

Bankers plan to price 4.3 million shares at $14 to $16 each on Wednesday evening, May 18, to trade on Thursday morning, May 19.

Looking into the week of May 23, 2016, the IPO calendar has one small-cap deal expecting to raise $22.2 million. But anything could happen on Monday morning, May 16, 2016, to shape the agenda for the rest of May.

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.