The IPO Buzz: Bio-IPOs Bubble Up, Up and Away

The 2013 calendar generated 38 Bio-IPOs as of Sept.20, 2013, according to U.S. Securities and Exchange Commission filings. Of that number, 32 closed on Friday in the winner’s circle, six were losers, and the average gain for all 38 stood at 61.7 percent.

 

The Bio-IPOs’ performance is better than 2013’s overall IPO market.

 

The 2013 calendar has produced 151 IPOs. Of that number, 112 closed on Friday in the winner’s circle, 39 were losers, and the average gain for all 151 was 34.5 percent.

 

The year’s top two IPO winners are:

There are 13 health-care IPOs in the pipeline; none are scheduled to make their debuts this week. But don’t cry for the IPO market.

 

 

This week’s calendar lists eight deals. They are expected to raise nearly $2 billion. The thing making this week interesting are that among the companies going public – half are household names. They are: Burlington Stores (BURL  – proposed), Empire State Realty Trust (ESRT – proposed), Potbelly Corporation (PBPB – proposed) and RE/MAX Holdings (RMAX – proposed).

 

Burlington Stores is a North Burlington, New Jersey-based national off-price retailer best known as the parent of the Burlington Coat Factory stores. The chain also sells other branded apparel, including shoes, for men, women and children. The company operates 503 stores in 44 states and Puerto Rico. For the six-month period ended Aug. 8, 2013, Burlington reported a net loss of $30 million on revenues of $2.04 billion, compared with a net loss of $104.9 million on revenues of $1.86 billion for the same period a year ago. Founded in 1972, the company has about 29,556 employees.

 

Underwriters plan to offer 13.3 million shares of Burlington Stores at $14 to $16 each to raise $200 million. The IPO is expected to be priced Tuesday evening and trade Wednesday morning on the New York Stock Exchange. The joint-lead managers are J.P. Morgan, Morgan Stanley, BofA Merrill Lynch, Goldman Sachs and Wells Fargo Securities. The co-managers are: BMO Capital Markets, Guggenheim Securities, Telsey Advisory Group, Cowen, SunTrust Robinson Humphrey and Ramirez.

 

Empire State Realty Trust is a New York City-based real estate investment trust best known for its trophy property, the Empire State Building. This REIT is engaged in owning, managing, operating and acquiring repositioned office and retail properties in Manhattan and the greater New York metropolitan area, Putnam County and Rockland County in New York, and Bergen County, Hudson County and Passaic County in Northern New Jersey. For the six-month period ended June 30, 2013, Empire State Realty reported net income of $5 million on revenues of $122.0 million, compared with net income of $17.6 million on revenues of $117.2 million for the same period a year ago. Founded in 2011, the company has about 629 employees.

 

Underwriters plan to offer 71.5 million shares of Empire State Realty at $13 to $15 each to raise $1 billion. The IPO is expected to be priced Tuesday evening and trade Wednesday morning on the New York Stock Exchange. The joint-lead managers are: Goldman Sachs and BofA Merrill Lynch. The co-managers are:  Barclays, Citigroup, Deutsche Bank Securities, Wells Fargo Securities, Capital One Securities, HSBC, KeyBanc Capital Markets, PNC Capital Markets, RBS, Stifel, Lebenthal Capital Markets, Loop Capital Markets and Ramirez.

 

(Note: From its prospectus: “Although we have not previously paid distributions, we intend to pay a pro rata initial distribution with respect to the period commencing on the completion of this offering and ending December 31, 2013, based on $0.085 per share for a full quarter. On an annualized basis, this would be $0.34 per share, or an annual distribution rate of approximately 2.4% based on the mid-point of the range of prices set forth on the front cover of this prospectus.”)

 

 

Potbelly is a Chicago-based restaurant chain of 286 quick-service restaurants specializing in fresh-made sandwiches in 18 states and Washington, D.C. For the 26-week period ended June 30, 2013, Potbelly reported net income of $2.8 million on revenues of $146.9 million, compared with net income of $3.0 million on revenues of $131.5 million for the same period a year ago. Founded in 1977, the company has about 629 employees.

 

Underwriters plan to offer 7.5 million shares of Potbelly at $9 to $11 each to raise $75 million. The IPO is expected to be priced Thursday evening and trade Friday morning on the Nasdaq Global Select Market. The company plans to sell 7.36 million shares in the offering and selling shareholders to sell 140,000 shares. The joint-lead managers are: BofA Merrill Lynch and Goldman Sachs. The co-managers are: Baird, William Blair and Piper Jaffray.

 

RE/MAX Holdings is a Denver, Colorado-based franchisor of real estate brokerage services. The company’s strategy is to recruit and retain agents and sell franchises. RE/MAX has about 92,474 agents in about 6,380 offices operating in 96 countries. For the six-month period ended June 30, 2013, RE/MAX reported net income of $15.0 million on revenues of $78.3 million, compared with net income of $13.8 million on revenues of $70.2 million for the same period a year ago. Founded in 1973, the company has about 439 employees.

 

Underwriters plan to offer 10 million shares of RE/MAX at $19 to $21 each to raise $200 million. The IPO is expected to be priced Tuesday evening and trade Wednesday morning on the New York Stock Exchange. The joint-lead managers are: Morgan Stanley, BofA Merrill Lynch and J.P. Morgan. The co-managers are: William Blair, RBC Capital Markets and JMP Securities.

 

These are what the IPO professionals see as the week’s leading stories.

 

Looking into next week, the calendar has three IPOs. They expect to raise over $600 million. Under the JOBS Act, though, the calendar can expand quickly.

 

Stay tuned.