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2013 IPO market set to kick off as calendar swells
Analyst IPO Market Commentary
After a slow holiday week started off the year, IPO activity is picking up steam. Five new deals have launched this week and are
scheduled to price the week of January 14
. The group is comprised of data center REIT CyrusOne (
), cruise operator Norwegian Cruise Line (
) and three LPs, USA Compression Partners (
), CVR Refining LP (
) and SunCoke Energy Partners LP (
). January is typically the slowest month of the year for IPO pricings,
averaging only six new deals since 2003
, with a peak of 15 new deals in 2006 and a low of zero in both 2003 and 2009.
CyrusOne, a Cincinatti Bell carve-out, operates data center REITs primarily in Texas and Ohio and will attempt to capitalize on investor interest in this sector caused by the ongoing shift to outsourced data center infrastructure. Comparable companies, such as Digital Realty Trust (NYSE:DLR) and DuPont Fabros Technology (NYSE:DFT), have vastly outperformed the broader markets since November. In addition, close comparable CoreSite Realty (NYSE:COR) is currently trading at an all time high and is up over 30% from its mid-November price.
Owned by Asian cruise and gaming company Genting HK and PE firms Apollo and TPG, Norwegian Cruise Line is the third largest cruise line operator in North America behind Carnival (NYSE:CCL) and Royal Caribbean (NYSE:RCL). The company is planning on adding three new ships to its 11-ship fleet over the next three years. It is betting on a recovery in demand after a tough macro environment coupled with the Costa Concordia disaster caused top-line growth to decelerate meaningfully in 2012.
Like CyrusOne, the LPs will also seek to take advantage of strong performance by their peers. USA Compression Partners originally filed for an IPO in June 2011 and was likely encouraged to launch its deal after the run of successful LP IPOs in late 2012. Since September, nine LPs have have gone public, of which eight have traded up and four have risen by more than 30%. The lone exception, Lehigh Gas Partners (
), is down only 0.5% since its October debut. CVR Refining LP, which is set to be the largest of the five deals at $500 million, should also be encouraged by the strong performance of refiner PBF Energy (
), which has traded up 6% since its December debut. Icahn Enterprises has indicated an interest in buying $100 million on the offering.
Following a tepid December, it is not surprising that this first wave of IPOs is driven by two sectors where there appears to be considerable investor appetite. This strong start to 2013 bodes well for the coming months. In addition to the companies that launched deals this week, there are a variety of companies that could schedule their debuts in the near future, including several confidential filers.
Deals scheduled for week of January 14
LP providing natural gas compression services in the U.S.
CVR Refining, LP
LP formed to own and operate petroleum refining and auxiliary businesses
Cincinnati Bell's data center REIT.
Norwegian Cruise Line
Third largest cruise line operator in North America
SunCoke Energy Partners
Owner and operator of cokemaking facilities and related energy assets.
*$ in millions.
Keywords / Tickers: USAC, LGP, SXCP, CVRR, CONE, NCLH,
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