Signaling an economic recovery, the Initial Public Offering, or IPO, scene has once again become vibrant. In what is likely to be the most active week in over an year, several companies, including Spanish bank Banco Santander SA, insurance data provider Verisk Analytics Inc and biotech firm Omeros Corp, have announced stock offerings.
The uptick in the offerings comes as no surprise, as the equity markets have shown resiliency even amid the downturn and have been broadly higher since March this year following a sharp correction that was witnessed for most of 2008. Since their March lows, the Dow Industrials has been up about 50% compared to a 57% gain by the S&P 500 Index and a 70% advance by the Nasdaq Composite Index.
Monday, Banco Santander SA said it is offering shares of its Brazilian unit, Banco Santander (Brasil) SA, in the largest ever offering in Brazil. The offering of 525 million units, slated to be priced on October 6, is expected to raise over $7.2 billion. The stock will be listed on the New York Stock Exchange as well as in Sao Paulo.
The company intends to use 70% of the net proceeds from the offering to expand its physical infrastructure, including opening new branches and installing additional ATMs, and to fund increased credit transactions in its Commercial Banking and Global Wholesale Banking segments more efficiently. About 20% of the net proceeds will be used to improve its funding structure and the remaining 10% will be used to increase its capital base, improving the Basel capital adequacy ratio.
Verisk Analytics is a provider of detailed actuarial and underwriting data pertaining to U.S. property and casualty insurance risks. The company said Monday in an SEC filing that it expects to sell 85.25 million shares for $19-$21 per share. The expected net proceeds from the sale are about $2.0 billion. The stock will be listed on Nasdaq under the symbol "VRSK". All the shares in the IPO are being sold by Verisk's existing shareholders.
Omeros said that it plans to sell 6.82 million shares for $10-$12 in a $75 million IPO launched on September 18. The IPO is set for an October 7 pricing and will be listed on Nasdaq under the symbol "OMER". The company intends to use the net proceeds from the offering to fund the completion of its Phase III clinical trials of OMS103HP, a product candidate for use during arthroscopic surgery to improve postoperative joint function and reduce postoperative pain, among others.
The total amount to be raised from these three IPOs in the week is over $9 billion. This is reportedly the highest in a week in the past 18 months after credit card company Visa Inc. (V) went public in March 2008 in a $19.6 billion IPO.
These IPOs may be pointing to a return of investor confidence as the economy is showing indications of a recovery. Several key reports released last week signal that the worst is over for the economy. Last week's retail sales report showed a better-than-expected 2.7% month-over-month increase in August and the Federal Reserve's industrial production report showed that U.S. industrial output rose for the second straight month in August. Last week, the Commerce Department said housing starts rose 1.5% month-over-month in August to 598,000.
Although a near term return to growth is guaranteed, helped by generous fiscal and monetary stimulus measures, the medium term trend is still uncertain, as doubts arise over the sustainability of the growth once all the stimulus is withdrawn. Additionally, consumer, the pillar of economic growth, has thus far shown trepidation, as income prospects remain bleak due to the still shaky job market.
Some of the companies that went public recently have seen moderate activity in their stock.
Avago Technologies Ltd. (AVGO), which closed its $15.00 per share IPO last month, began trading on August 6 at $16.50 and closed the opening day at $16.18. So far, the company has moved in the range of $15.50-$19.00.
Starwood Property Trust Inc. (STWD), which began trading on August 18, has to date seen its shares move on the NYSE between $19.48 and $20.25. The company's IPO was priced at $20.00 per share.
Emdeon Inc. (EM), which started trading on August 12, has been moving in the range of $15.87- $18.25. The company, a provider of healthcare claims and payment processing solutions, priced its IPO of 23.70 million shares of its Class A common stock at $15.50 per share.
Cumberland Pharmaceuticals Inc. (CPIX) last month priced its IPO of five million shares of common stock at $17.00 per share. On August 11, the company began trading on the Nasdaq at $17.00. The stock, which touched $17.47 on August 13, hit a low of $14.66 on September 14.
Going by past trends, the IPO market generally takes a break towards the end of August and picks up momentum after the Labor Day.
Among other IPOs announced recently, real estate finance company Colony Financial Inc. said in a September 18 filing that it intends to offer 25 million shares to the public for an anticipated price of $20 per share. The stock has been approved for listing on the New York Stock Exchange under the symbol "CLNY." The company expects net proceeds of about $482.8 million from this offering.
Online vitamin retailer Vitacost.com, Inc. said in a regulatory filing on September 18 that it is offering 4.43 million shares of its common stock and the selling stockholders are offering 6.57 million shares of common stock to the public. The IPO price is anticipated in the range of $11.00-$13.00 per share. The stock has been approved for listing on the Nasdaq under the symbol "VITC." Net proceeds from the offering will be used to repay existing indebtedness and to fund capital expenditures, among other things.
Vehicle auction services provider KAR Holdings Inc. said on September 14 in an SEC filing that it was selling shares for a proposed maximum amount of $400 million in an initial public offering. The company plans to use the proceeds from the offering to repay some debt, pay termination fees to equity sponsors and for general corporate purposes. The company plans to apply to have the stock listed on the New York Stock Exchange.
Biotechnology company Talecris Biotherapeutics Holdings Corp. last week revealed the launch of its IPO of 44.736 million shares for an expected price of $18-$20 per share. The company has applied to have the stock approved for quotation on the Nasdaq under the ticker symbol "TLCR."
Select Medical Holdings Corp., the parent of specialty hospitals operator Select Medical Corp., on September 10 announced the launch of its IPO of 33.33 million shares for net proceeds of up to about $433 million. The company has applied to have its common stock approved for quotation on the New York Stock Exchange under the symbol "SEM."
China-based online-games provider Shanda Interactive Entertainment Ltd. (SNDA) said on September 3 that it intends to raise about $800 million through an initial public offering of its unit Shanda Games Limited. The company intends to use the net proceeds from the offering for general corporate purposes, including capital expenditures and funding possible future investments, joint ventures and acquisitions. Once listed, the company will trade on the Nasdaq Global Select Market under the ticker GAME.
On September 9, Julius Baer Holding Ltd. said its unit Artio Global Investors Inc., the parent company of Artio Global Management LLC, has launched marketing of its initial public offering of 23.4 million shares of its Class A common stock in the U.S. The proposed offering is expected to price and be completed by September 30. The shares have been approved for listing on the New York Stock Exchange under the ticker symbol "ART".
Thanks to the economic crisis, the IPO market had been hard-hit until recently. For the first six months of 2009, there were only 14 IPOs that raised $2.3 billion, sharply lower than the 43 offerings that raised $27.7 billion for the same period in 2008. The largest IPO in the first half of 2009 was the $720 million offering by Mead Johnson Nutrition Co.
The NYSE continued to lead in 2009 IPO volume with 11 IPOs generating $2.0 billion in proceeds, which is 88% of the total proceeds raised during the first six months of 2009.
Last year, 43 companies reportedly completed IPOs in the U.S., compared to 272 in 2007 and 221 in 2006. The amount of money raised through IPOs dropped 53% last year to $28 billion, in which Visa Inc.'s IPO in March alone raised over $19 billion.
PricewaterhouseCoopers said in a report in July that second quarter IPO market recorded first increase in activity since 2007. According to Scott Gehsmann, a capital markets partner in PricewaterhouseCoopers' Transaction Services practice, "A few select companies were able to take advantage of the capital markets which started to improve in late March. As we move toward the later part of the year, we will see more companies testing the IPO waters."
If the indications of the economic recovery prove real, we will see more companies going public.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.