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Slow but steady improvements in the IPO market this year were stalled last week as a dramatic US market plunge and escalation of the Greek debt crisis caused investors to lower risk appetite and focus on their core portfolios.

Of the eight deals that were on the IPO calendar last week, only two were completed and both were at lower-than-expected prices. Charm Communications (CHRM), the largest TV ad agency in China, raised $74 million but priced its 7.8 million American Depository Shares at $9.50, lower than the midpoint of its original $9-$11 range. The stock fell -1% in its debut. Douglas Dynamics (PLOW), the largest provider of snowplows and sand and salt spreaders in North America, also received a lackluster reaction, closing up 0.4% from its IPO price of $11.25. The snowplow company had originally planned to sell its 10 million shares at a range of $14-$16 but ended up raising 30% less than originally sought.

There were four IPO postponements: temperature-controlled warehouse REIT Americold Realty Trust (ACRE), dental care provider Smile Brands Group (GRIN), metal distributor Ryerson Holding (RYI) and Madison Square Capital (MDQ), a newly-formed REIT planning to invest in agency securities. At $645 million, the Americold deal was expected to be the largest IPO year-to-date. The remaining two IPOs, Chinese E&P MIE Holdings (MIE) and independent production company Film Department Holdings (TFDI), had their pricing dates pushed back to this week.

The global IPO market was impacted as well, with stalled deals including real estate conglomerate Swire Pacific's planned $2.7 billion debut on the Hong Kong Exchange, China's New Century Shipbuilding's $610 million Singapore listing and Cerberus-backed German real estate company GSW Immobilien's $630 million offering. All were expected to be the largest IPOs in their respective areas year-to-date.

The IPOs pushed back this week bring the total of postponed or withdrawn US deals to 18. Although IPO activity has been mostly steady, investors are still being cautious and valuation-sensitive, rejecting some deals and pushing down offer prices on others. One effect is the rise in private equity-to-private equity sales as buyout firms look to avoid the risk of a lukewarm reception by IPO investors. Recent sales include Oak Hill Capital's $570 million purchase of Wellspring Capital's Dave and Buster's (DANB), TPG Capital's $1.3 billion purchase of Francisco Partners' American Tire Distributors (ATD) and New Mountain Capital's purchase of software firm RedPrairie (RP), also from Francisco Partners.

Several highly anticipated companies have recently been added to the IPO pipeline, including largest US options exchange CBOE (CBOE; $300 million deal size) and largest hospital operator in the US HCA (HCA; $4.6 billion), which should be good indicators of how quickly and to what extent investors are willing to return to the IPO market. CBOE's offering is slated for mid-June, while at least 11 other companies still hope to tap the IPO market by then. Though news of the European Union's $1 trillion bailout caused the U.S. market to surge on Monday with several major indices making their largest one-day-gains since 2008, lingering fears could result in a choppy IPO market in the near term.

Source: High Stock Volatility Stalls IPO Market