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Three deals priced last week to push 2012’s deal count past 2011’s, but the investor response was mostly muted. Although Elon Musk-backed SolarCity (NASDAQ:SCTY) had the tenth-best first-day gain of the year, the solar panel installer was forced to cut its price range by 43%. The other two US IPOs priced within the range but had weak early trading.

SolarCity gains after sharp valuation cut

SolarCity jumped 47% on its first day of trading, but the pricing was delayed after investors balked at the originally proposed valuation. The company raised $92 million after pricing at $8, far below the proposed range of $13 to $15, but closed the week slightly below $12. Insiders, including Elon Musk, who bought $15 million, purchased 32% of the deal. Goldman Sachs (NYSE:GS), Credit Suisse (NYSE:CS) and BofA Merrill Lynch (NYSE:BAC) were the joint bookrunners.

The IPO market for cleantech has been a challenging one in 2012, with only four IPOs completed out of eight attempted offerings. Trading has been very negative for the three prior completed deals, Enphase Energy ((NASDAQ:ENPH) -46%), Ceres ((NASDAQ:CERE) -70%) and Renewable Energy Group ((NASDAQ:REGI) -38%).

PBF Energy upsizes deal

PBF Energy (NYSE:PBF), the fifth-largest US independent refiner, raised $520 million in the largest deal of the week, after offering an extra 3.5 million shares at the midpoint. The stock gained less than 1 percent on its first day of trading, although it rose another 3% on Friday. Recent refining LP IPOs have performed strongly: Northern Tier Energy (NYSE:NTI) is up 69% from its July IPO, and Alon USA Partners (NYSE:ALDW) is up 36% from its November IPO. Citi (NYSE:C), Morgan Stanley (NYSE:MS), Credit Suisse and Deutsche Bank (NYSE:DB) were the joint bookrunners.

Silver Bay Realty Trust falls in debut

Silver Bay Realty Trust (NYSE:SBY), a newly organized REIT focused on single-family properties, broke its IPO price, falling 1% on its first day of trading on Friday. The company raised $245 million by pricing slightly below the midpoint. Mortgage REIT Two Harbors Investment (NYSE:TWO) is contributing 3,100 properties, mostly in Arizona, Florida and Georgia. Credit Suisse, BofA Merrill Lynch and J.P. Morgan (NYSE:JPM) were the joint bookrunners.

Pipeline activity limited to a trio of small deals

Professional Diversity Network (NASDAQ:IPDN), which provides social networking for minority professionals, set terms on Friday to raise $10 million. Revenue was $6 million for the twelve months ended September 30, 2012. An exclusive agreement with online recruiting company Monster Worldwide (NYSE:MWW), which has generated 63% of revenue, is being replaced with a non-exclusive agreement with LinkedIn (NYSE:LNKD) at the end of the year. Aegis Capital is the sole bookrunner.

North Atlantic Drilling (NYSE:NADL), which operates a fleet of nine offshore drilling rigs, filed for a $40 million IPO. The company, which is already OTC-listed in Oslo, was formed by Seadrill (NYSE:SDRL) in February 2011 and booked $997 million in revenue for the twelve months ended September 30, 2012. Morgan Stanley is the lead bookrunner.

Harvard Apparatus Regenerative Technology (NASDAQ:HART), which produces tools used in creating replacement tracheas, filed for a $20 million IPO. The Harvard Bioscience (NASDAQ:HBIO) subsidiary has not generated any revenue and hopes to obtain EU approval in 2015. Summer Street Research Partners is the lead bookrunner.

The US IPO pipeline now consists of 114 companies looking to raise $34.2 billion. Zoetis plans to raise up to $4 billion as early as January or February. In the past 90 days, 42 companies have updated their filings with the SEC.

IPO performance update

Although issuance has been slow, with the second-lowest number of deals in December since 2002 (4 vs. 10-year average of 15), returns have been strong recently. IPOs from the past 90 days have produced an average total return of 20% and an average aftermarket return of 7%. Year-to-date, 128 IPOs (up 2% y/y) have raised $42.6 billion (up 18%). The average total return is 17%, and the average aftermarket return is 3%.

Source: Tough Reception For Final U.S. IPOs Of 2012