IPOs could raise as much as $1.9 billion this week
Eight companies hope to raise up to $1.9 billion through initial public offerings by Friday, potentially the biggest week for IPOs so far...
NEW YORK — Eight companies hope to raise up to $1.9 billion through initial public offerings by Friday, potentially the biggest week for IPOs so far this year.
Forty companies have raised $6 billion in IPOs this year, according to Renaissance Capital. If all the offerings on tap this week price at the top of their expected ranges, proceeds would equal one quarter of the total amount raised by initial offerings in 2010 so far.
Two small deals, Chinese ad agency Charm Communications, seeking about $78 million, and dental-services provider Smile Brands Group, planning on about $126 million, are generating the most buzz.
But even that interest is muted after two largely disappointing weeks for the IPO market marked by a number of offerings that priced low and fell on their first day of trading.
"People right now are more inclined to buy in the broader markets than IPOs," said Scott Sweet of IPOBoutique, citing the uncertainty in pricing and first-day trading of recent offerings.
Private equity Yucaipa Cos. is bringing to market the biggest deal this week, warehouse real-estate investment trust Americold Realty Trust. The $645 million IPO would be the largest this year, surpassing Sensata Technologies Holding's $568.8 million IPO in March.
The other companies expected to go public this week include Ryerson, MIE Holdings, Douglas Dynamics, Madison Square Capital and S&W Seed.
Ryerson, a $400 million IPO, is a Chicago-based metals processor.
MIE Holdings, a Chinese oil company that has long-standing production-sharing contracts with PetroChina, Asia's biggest oil producer, is looking to raise about $225 million. It could be a hit, analysts say, but it could be pricier than such dominant Chinese oil firms as PetroChina and Sinopec Shanghai Petrochemical.
Douglas Dynamics, a maker of snowplows and snow-control products based in Milwaukee, hopes to raise about $150 million. So does Madison Square Capital, a New York real-estate investment trust that would buy up government-backed mortgage securities.
S&W Seed, an alfalfa-seed distributor based in Five Points, Calif., also hopes to raise $15.6 million.
"They're going to have a tough time selling these things," IPOBoutique's Sweet said, because of the recent volatility in the IPO market. Of the 13 companies that have gone public since the beginning of April, nine are trading below the offering price. "The market is stalling again."