Investing

3 IPOs Next Week Hope to Raise $1.3 Billion

Paul Ausick

Published: April 17, 2016 9:27 am

Last Updated: January 13, 2020 10:41 am

Has the 2016 market for initial public offerings (IPOs) finally shaken off its torpor? An upsized IPO last week and three on the calendar for the coming week hoping to raise a total of about $1.3 billion at least offers some hope for better days ahead.

Bats Global Markets Inc. (BATS: BATS) went public on Friday, pricing its IPO at $19 a share, the top of its expected range. The better news is that the exchange increased the number of shares on offer from 11.2 million to 13.3 million and the stock closed at $23.00, up 21% for the day.

Through the week ending April 15th, IPO ETF manager Renaissance Capital reported that 10 IPOs have priced in the U.S. so far this year, down about 77% from a year ago. Total proceeds raised through last week equaled $1 billion, down nearly 86% compared with the same period in 2015. Of the 10 IPOs that have gone off this year, 9 have come from the healthcare sector. Last year’s IPO total came in at $30 billion on 170 offerings. Renaissance Capital does not include “best efforts” or blank-check companies in its totals.

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In the coming week a REIT, a healthcare company, and a cybersecurity firm are lining up to offer shares to the public.

MGM Growth Properties LLC is a REIT that plans to acquire, own, and lease large-scale destination and leisure resorts. At its IPO, the company will acquire from MGM Resorts International (NYSE: MGM) 9 destination resorts in the U.S. and 1 dining and entertainment complex. The company plans to offer 50 million shares in an IPO price range of $18 to $20 to raise $975 million. Joint bookrunners for the offering include BofA/Merrill Lynch, J.P. Morgan, Morgan Stanley, Evercore ISI, Barclays, Citi, and Deutsche Bank. Co-managers include BNP Paribas, Fifth Third Securities, SMBC Nikko, SunTrust Robinson Humphrey, Credit Agricole, Union Gaming, Scotiabank/Howard Weil, and Oppenheimer & Co. Shares are expected to price Tuesday and begin trading Wednesday on the New York Stock Exchange under the ticker symbol MGP.

American Renal Associates Holdings Inc. is the largest dialysis services provider in the U.S. The company plans to offer 7.5 million shares in an expected price range of $20 to $23 to raise $161.3 million at an implied market cap of $639 million. Joint bookrunners for the offering are BofA/Merrill Lynch, Barclays, Goldman Sachs, Wells Fargo Securities, and SunTrust Robinson Humphrey. Co-manager is Leerink Partners. Shares are scheduled to price Wednesday and begin trading Thursday on the New York Stock Exchange under the ticker symbol ARA.

SecureWorks Corp. is a security software provider that is currently an indirect wholly owned subsidiary of Dell Inc. and Dell’s parent company, Denali Holding Inc. The company plans to offer 9 million shares in an expected price range of $15.50 to $17.50, raising $148.5 million at an implied market cap of $1.34 billion. Joint bookrunners for the offering include BofA/Merrill Lynch, Morgan Stanley, Goldman Sachs, and J.P. Morgan. Co-managers include Barclays, Citi, Credit Suisse, RBC Capital Markets, UBS Investment Bank, Pacific Crest, Stifel, SunTrust Robinson Humphrey, William Blair, Academy Securities, Ramirez & Co., Siebert Brandford Shank, and Williams Capital Group. The offering is expected to price Thursday and begin trading Friday on the Nasdaq under the ticker symbol SCWX.