Friday's 2 IPOs Price Above Range

Includes: BV, PRLB
by: Renaissance Capital IPO Research

In a sign of strong demand, Fridays two IPOs both priced above the range.

Bazaarvoice (NASDAQ:BV), which provides an online customer review platform to brands and retailers, raised a greater-than-expected $114 million by offering 9,484,296 shares at $12, more than 30% above the midpoint of its proposed $8-$10 price range. Bazaarvoice will begin trading on Friday on the Nasdaq under the symbol BV. Morgan Stanley, Deutsche Bank Securities (NYSE:DB), and Credit Suisse (NYSE:CS) acted as joint book-running managers on the deal.

The Austin, TX based company generated $94 million in revenue in the 12 months ended January 31, 2012 but is currently unprofitable on an operating basis. Revenue grew 67% in its most recent fiscal year (April 2011) and 59% in the most recent quarter.

Bazaarvoice was the second IPO is the latest in a string of on-demand or subscription-based software IPOs to go public in recent weeks including insurance software provider Guidewire Software (NYSE:GWRE), electronic health records software provider Greenway Medical (NYSE:GWAY), and online video platform Brightcove (NASDAQ:BCOV).

Proto Labs (NYSE:PRLB), a manufacturer of quick-turn, low-volume molded custom parts for prototyping, raised $68.8 million by offering 4.3 million shares at $16.00, above the range of $13.00 to $15.00. The market cap is now $393.1 million, up from a proposed $342.3 million valuation. Proto Labs, which was founded in 1999, booked $99 million in sales over the last 12 months. The Maple Plain, MN-based company opened on the NYSE today under the symbol PRLB, and is currently trading over 70% above its offer price. Jefferies (JEF) and Piper Jaffray (NYSE:PJC) were the bookrunners on the deal.

Bazaarvoice and Proto Labs pricing above their anticipated ranges follow 17 consecutive US IPOs that had priced within or below their originally sought after valuation. The only other US IPO to price above its filed range year-to-date was Guidewire Software. Guidewire, which priced on January 24 at $13 per share, rose 32% in its market debut and last closed at $23.95, up 84% from its offer price (currently the best performing US IPO year-to-date).

After IPO issuance and performance significantly decreased in 2011, the IPO market is in full rebound mode, as evidenced by the double-digit year-to-date returns generated by the global and regional FTSE Renaissance IPO indices. With a return of 14.6%, the FTSE Renaissance Global IPO Index has outperformed both the FTSE All World Index (+10.4%) and the MSCI All Country World Index (+9.3%) so far this year, and the domestic FTSE Renaissance US IPO Index (+17.2%) has generated superior returns over the S&P 500 (+8.4%) and the Russell 3000 (+9.2%). With momentum picking up in the global equity markets and a long list of high-profile deals in the pipeline, 2012 is shaping up to become a strong year for IPOs.