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US IPO Week Ahead: Markets primed for a few end of year deals

November 25, 2016
Week Ahead

The only IPO on the calendar in the week ahead, cannabis facilities REIT Innovative Industrial Properties (IIPR), is looking to raise a downwardly revised $100 million. 

November has been a slow month for the IPO market with only three pricings, down sharply from October's 19 pricings and September's 16, yet this was largely attributed to election uncertainties and the Thanksgiving holiday. With those two events in the rear view and indices breaching all-time highs, the IPO market is primed for a few more deals in the coming weeks. Some of the larger names in the near term pipeline include Apollo-backed life insurance and annuity provider Athene Holding (ATH), oil and gas E&P WildHorse Resource Development (WRD) and Expedia spin-off trivago (TRVG).

IPO Pricings Week of November 28  
Issuer
Business
Symbol
Exchange
Deal Size($m)
Market Cap($m)
Price Range
Shares Filed
Pricing
Date
Bookrunners
Innovative Industrial Properties
San Diego, CA
IIPR
NYSE
$100
$101
$20
5,000,000
Ladenburg Thalmann,
Compass Point
Newly-formed REIT focused on medical-use cannabis cultivation facilities.

Innovative Industrial Properties (IIPR) delayed its IPO, which was set to price on Monday November 21, and subsequently updated its filing twice. The first update announced a potential forfeiture of zero-cost basis shares for management and the second confirmed that management will forfeit 100% of those shares and also decreased the propose deal size from $175 million to $100 million. The delay of the IPO, forfeiture of management shares and decrease in deal size highlight the difficulties in attracting investors to this newly-formed and highly-specialized REIT, despite a strong management track record. If it prices, Innovative Industrial will be the first REIT focused exclusively on cannabis facilities. 

Next week could also see the pricing of smaller, day-to-day deals Eagleline Acquisition (IGLEU), a health care-focused blank check company looking to raise $150 million, PetroShare (PRHR), a micro-cap oil and gas E&P looking to raise $28 million, and SenesTech (SNES), which is producing a rodent control chemical, looking to raise $20 million. 

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IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is up 1% year-to-date, while the S&P 500 is up 8%. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Citizens Financial Group (CFG) and Alibaba (BABA). The Renaissance International IPO Index is down 7% year-to-date, while the ACWX is flat. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF holdings include Recruit Holdings and Samsung C&T. To find out if this is the best ETF for you, visit our IPO Investing page.