IPO Surge: 18 Companies Will Price in Next Two Weeks
The IPO market might not be booming, but there's no doubt, it's alive and getting stronger.
This week, eight companies are expected to price. Next week, there are 10.
"Yes, it's back," said Francis Gaskins of IPODesktop.com. "In the first two weeks of December, there were 10 IPOs each week, so (2010) left with a pretty big bang.
"Most of them (this week) have pretty good top line revenue growth and are making money—not all of them, but most of them. So the window's wide open."
Of the eight pricing this week, the most buzz surrounds three names: Nielsen Holdings, BankUnited and Demand Media.
Nielsen is a well-known brand, especially anyone interested in television ratings. They are a company focused on "consumer behavior," and revenues topped $5 billion last year.
If it prices around $21, then it will raise $1.5 billion and have a market cap of $7.4 billion. Proceeds will go toward paying down debt, and the company has plenty of that.
It was taken private in a leveraged deal involving a host of big-name private equity firms: KKR, Blackstone, Thomas H. Lee Partners and The Carlyle Group.
The total price tag was slightly less than $10 billion.
It will have the ticker NLSN, but trade on the NYSE.
Then, there's BankUnited. The Florida bank was seized by the FDIC in 2009 and then transferred into private equity hands. CNBC viewers will know the name because Wilbur Ross is involved with the ownership group.
It is expected to raise approximately $630 million and trade on the NYSE under the ticker BKU.
If it does well, we could see more banks come to market.
Demand Media is an online content company that also earns a lot of money from domain names. It competes with the likes of Yahoo and AOL , and is expected to be much smaller, raising $113 million.
Insiders will be selling a lot of shares, and there are some questions about the business model. But the appetite for internet and content could trump those factors.
Of the other five, all of them are based outside the United States.
Velti (VELT) is an Irish company that focuses on mobile advertising. InterXion (INXN) is in Holland and has a core business in data services.
Adecoagro (AGRO) is interesting from the perspective of global commodity inflation. It's a South American agricultural company that has backing from billionaire George Soros.
The other two are based in China: BCD Semiconductor (BCDS) and Zuoan Fashion (ZA).
Zuoan designs and makes men's clothing in China. It's goods are in more than one thousand stores, and the $80 million from the IPO will go directly into growing and improving the business.
BCD makes analog chips that go in a range of products—from televisions to mobile phone chargers. It's not a start-up per se, because it's been around for a decade.
"Their revenue was up comparing September 2010 to September 2009," Gaskins said. "The company has really good internal growth."
Of course, many retail investors cannot participate in IPOs. If an investor is shut out, there are ways to buy into a company, but perhaps, not on the first day of trading.
"Sometimes, there's a big pop in the couple of days after the first day," Gaskins said. "They really probably should wait a couple of days to see where it settles out if they're interested in the long term market."
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