1/13/12 Analyst IPO Blog

Technology companies were the center of attention in the US IPO market this week. Splunk (SPLK), AVG Technologies (AVG) and Audience (ADNC) officially filed, while Guidewire (GWRE) and IntelePeer (PEER) both announced they would price the week of January 23rd. With the 6 new technology related filings this month, the industry's representation in the IPO pipeline reached 57, or 26% of the total. Altogether there were 5 US IPO filings this week, with estimated proceeds totaling over $522 million. Only 6 more are needed for this to be the most active January for filings in a decade (prior peak was 17 in January 2005). On the year, the FTSE Renaissance US IPO Index is up 5.4%, more than double the return of the S&P 500, signaling that performance is improving after a disappointing 2011.

On Monday, Guidewire (GWRE), which specializes in software for P&C insurance companies, announced that it would seek to raise $82.5 million by offering 7.5 million shares. Sales grew by 51% for the most recent quarter. IntelePeer (PEER), a cloud-based communications service provider, set terms for a $75 million offering on Tuesday. Its customers include Sprint Nextel and Qwest Communications. Splunk (SPLK), a data analytics software provider, registered with the SEC for a $125 million IPO on Thursday. CEO Godfrey Sullivan was previously CEO of Hyperion Solutions Corporation. Today, AVG Technologies (AVG), a provider of antivirus, identity protection, and other security tools for the consumer market, registered for a $125 million IPO. Net income for the twelve months ended September 30, 2011 was $110 million. Finally, Audience (ADNC) filed late on Friday for a $75 million IPO. The Mountain View, CA based company provides a platform to improve audio and voice quality in mobile devices.

In other activity, three biopharmaceutical companies were added to the calendar on Friday. Verastem (VSTM) will be pricing the week of January 23rd, followed by Cempra Holdings (CEMP) and Merrimack Pharmaceuticals (MACK) the week after. And a string of oil industry filings continued with the registrations of pipe, valve and fitting provider MRC Global (MRC) and US-based oil and natural gas E&P Cinco Resources (CINC) on Thursday.

Next week will see the first US IPO pricing of the year. Renewable Energy Group (REGI), the largest biodiesel producer in the US, is seeking $100 million in proceeds at a price range of $13.00 to $15.00. But given biodiesel's specialized nature, we expect that the following week will go further in setting the tone for the early 2012 IPO market, when the more typical high growth companies Guidewire and IntelePeer price.

With this week's filings, the US IPO backlog now totals 216, representing $49.3 billion in estimated proceeds.