May's IPO Activity Approaching 4-Year High

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Includes: CARB, DNKN, FSL, LNKD
by: Renaissance Capital IPO Research

This year has seen a resurgence of US IPO filings and activity. With an ebbing of uncertainty, capital markets have accelerated the processing of pent up demand for companies seeking public markets. The 2011 market has been demonstrably more active than 2010 by any metric, and this month has been no exception.

May's busy IPO schedule has contributed to a notable pickup in IPO activity from last year. Year to date, there have been 124 IPOs filed (+20% yoy) and 67 IPOs priced (+37% yoy), raising a total of $21 billion (+190% yoy). It is notable that the average return for investors is 10% this year versus a 7% return on the broader US market indices.

Though only half way through the month, year on year metrics for US IPO activity already show that May's pricing and filing activity will handily surpass prior year comparable numbers and put it on pace for the most active IPO month since levels seen in 2007. Now, eighteen days into the month, there have been 26 new IPO filings, already equaling the total number of filings in May 2010. Of those companies which filed this month, the more visible deals include Dunkin' Brands (NASDAQ:DNKN), purveyor of the Dunkin' Donuts and Baskin Robbins franchises, BATS Exchange (BATS), which operates electronic trading markets in US and Europe, Convergex (CVGX), a provider of software solutions to asset manager customers, and Carbonite (NASDAQ:CARB), which provides online backup solutions for individuals and businesses.

There have been 13 deals priced month to date versus 12 for the entire month last year. Notable deals which have priced this month include Air Lease Corporation (NYSE:AL) ($803 million), a global aircraft leasing company, RenRen (NYSE:RENN) ($743 million), China's leading social networking site, and Kosmos Energy (NYSE:KOS) ($594 million), an oil exploration firm focused on deepwater prospects in West Africa. In total, IPO issuance generated $4.4 billion in proceeds.

There are still several high profile deals scheduled to arrive before month-end. LinkedIn (NYSE:LNKD), which operates the world's leading online professional network, is seeking to raise over $340 million after upsizing their offering in a deal that will price on Wednesday. Yandex (YNDX), Russia's largest online search engine, is set to raise $1.1 billion in a deal pricing next week. Freescale Semiconductor (NYSE:FSL), a leader in embedded processing semiconductors, hopes to raise over $1 billion and will price mid next week. Another six IPOs are scheduled to price before month end: Spirit Airlines (SAVE), The Active Network (NYSE:ACTV), Lone Pine Resources (LPR), Sabre Industries (NASDAQ:SABR), Nobao Renewable Energy (NYSE:NRE), and Solazyme (SZYM). Assuming no changes to the above listed offerings, May 2011 will see a total of 20 deals priced raising $8.1 billion.