Global market volatility and rising recession fears finally began to take its toll on new IPO filings as the stream of S-1s at the SEC slowed to a trickle by the end of the month. While the first two weeks of September saw eleven new filings, only six companies announced intentions of going public in the second half of the month, four of which were clean tech firms.
The US IPO pipeline now stands at 210 companies looking to raise a potential $53 billion in capital. 68% of the companies in the pipeline have either submitted new or updated filings with the SEC in the last 90 days, indicating that most companies are intent on keeping their IPO plans active despite the current market environment. This suggests that we could see pockets of activity once the market is able to find some stability.
Four new renewable energy companies entered the US IPO pipeline in the second half of September, for a total of 13 IPO candidates in the clean tech sector. The relatively risky companies (all are unprofitable and one has generated zero revenue) will serve as a test of investor appetite. Several recently public biofuel companies have experienced wild swings in their stock prices, including KiOR (NASDAQ:KIOR), +12% from IPO; Solazyme (SZYM), -50%; and Gevo (NASDAQ:GEVO), -62%.
Fulcrum Bioenergy, a producer of biofuels through the conversion of municipal solid waste, filed with the SEC to raise up to $115 million in its IPO. The Pleasanton, CA-based company, which was founded in 2007 and has generated no revenue to date, plans to list under the symbol FLCM.
Elevance Renewable, which produces chemicals used in household products from renewable natural oils, filed with the SEC to raise up to $100 million in its IPO. The Woodridge, IL-based company, which was founded in 2007 and booked $21 million in sales for the 12 months ended June 30, 2011, plans to list on the Nasdaq under the symbol ERSI.
Mascoma, which has developed a platform to convert renewable feedstocks into chemicals used in alternative fuels, filed with the SEC to raise up to $100 million in its IPO. The Lebanon, NH-based company, which was founded in 2005, booked $16 million in sales for the 12 months ended June 30, 2011.
Trellis Earth Products, which develops bioplastics-based products for use primarily in the food industry, including disposable deli ware, cutlery, trash liners and shopping bags, filed with the SEC to raise $22 million in its IPO. The Wilsonville, OR-based company, which was founded in 2006 and booked $3 million in sales for the 12 months ended June 30, 2011, plans to list on the Nasdaq under the symbol TREL.
September's filings also included two hydraulic fracturing companies, FTS International (also known as Frac-Tech Services), which plans to raise $1.15 billion in its IPO, and Platinum Energy Services, which plans to raise $300 million. The two companies follow in the footsteps of fracturing services provider C&J Energy Services (NYSE:CJES), which gained 5% in its July debut before falling victim to market headwinds; the stock now trades 49% below its IPO price of $29.
Despite this summer's market volatility, private equity and venture capital firms continue to view the public markets as a viable exit strategy, with financial sponsor-backed companies representing ten of September's 17 filings. The US IPO backlog now includes 116 financial sponsor-backed companies, representing 55% of the total. 66% of US IPOs priced year-to-date have been backed by private equity or venture capital firms.