Fresh Wave of IPOs Hits U.S. Market

Includes: CSOD, QIHU, SREV
by: Renaissance Capital IPO Research

US IPO market activity is off to a strong start in the second quarter of 2011, with nine new deals launched within the past three days. These nine companies, which span a wide range of industries including financial services, technology, transportation, energy and health care, have filed to raise an estimated $2 billion in aggregate IPO proceeds. The diverse crop includes REITs AG Mortgage Investment Trust (MITT) and STAG Industrial (STIR), aircraft lessor Air Lease Corporation (AL), shipping company Box Ships (TEU), marketing software firm Responsys (MKTG), wireless chip manufacturer Sequans Communications (SQNS), crude oil and refined products logistics assets spinoff Tesoro Logistics LP (TLLP), injectable pharmaceuticals company Sagent Pharmaceuticals (SGNT), outsourced steel services provider TMS International (TMS) and China-based data center services provider 21Vianet Group (VNET).

The sudden onset of filings suggests the window is beginning to open again for the US IPO market. Global volatility in recent weeks resulted in a muted period for IPOs as companies waited on the sidelines for a more favorable market environment to raise capital. With IPO investors' fears subsiding, candidates in the US IPO pipeline that have been filing amendments and updating year-end results are now coming forth with specific pricing terms and timing. Strong debuts from recent IPOs such as China's Qihoo 360 [(NYSE:QIHU); +92%], hardware/software services revenue platform ServiceSource International [(NASDAQ:SREV); +29%] and talent software provider Cornerstone OnDemand [(NASDAQ:CSOD); +44%] likely acted as further catalysts.

There are twelve US companies expected to go public within the next two weeks, with notable deals including car-sharing services provider Zipcar (ZIP) and Latin American McDonald's franchisee Arcos Dorados (ARCO). Deal flow outside of the US is accelerating as well, particularly in Russia, which has three blockbuster LSE listings on the horizon. There are currently 31 global (US and non-US) deals already scheduled on the IPO calendar, which could raise more than $23 billion in total proceeds.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.