Market Overview

IPO Lookout: Lots of Action This Week, But Is Anything A Worthwhile Investment?

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UPDATE: Morgan Stanley Initiates Coverage On Orion Engineered Carbons SARL As Leading Carbon Black Producer

The week of July 21 is a continuation of the IPO ramp-up, with 13 new issues expected to price, raising $1.5 billion in proceeds.

Orion Engineered Carbons (NYSE: OEC), the largest IPO, expects to price its 18 million-share IPO between $21 and $24 through Morgan Stanley and Goldman Sachs.

The company specializes in producing carbon black, which enhances some properties of materials it is added into. According to the company's website, “Our high-quality Gas Blacks, Furnace Blacks and Specialty Carbon Blacks tint, colorize and enhance the performance of plastics, paints and coatings, inks and toners, adhesives and sealants, tires, and manufactured rubber goods such as automotive belts and hoses.”

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Future strategy for the company is to continue to dominate its leadership in carbon black, to increase rubber carbon black while growing its global customer base, and to improve its operational efficiency. 

Incorporated in 2011, the company’s move toward profitability has been slow. To date, it has been unable to realize a profit after taxes. For the three months ending on March 31, Orion Engineered Carbons turned a $6.6 million profit before taxes, which resulted in a $0.6 million loss after taxes.

Proceeds of the offering will be used to retire outstanding debt issued in January 2013 by Kinove Holdings.  The company will not receive any proceeds for the offering.

Offerings for the Week of July 21

·   Spark Energy (NASDAQ: SPKE): expects to issue 3 million shares between $19 and $21 through Baird and Stifel, with an unknown offering date this week.

·   Pfenex (NYSE: PFNX): 8.1 million shares expected to price at $8 per share, through William Blair and JMP Securities.  Originally expected to open last week, Pfenex’s offering date this week is unknown.

Thursday, July 24

·   Atara Biotherapeutics (NASDAQ: ATRA): expects to issue 5 million shares between $14 and $16, through Goldman Sachs and Citigroup.

·   Immune Design (NASDAQ: IMDZ): 4.65 million shares, expected to price between $12 and $14 through Jefferies and Leerink.

·   Townsquare Media (NYSE: TSQ): 8.3 million shares, expected to price between $14 and $16, through Merrill Lynch, Jefferies, RBC, Guggenheim, and Macquarie.

·   Mapi-Pharma (NASDAQ: MAPI): 2.7 million shares, expected to price between $13 and $15, through Aegis.

Friday, July 25

·   Advanced Drainage Systems (NYSE: WMS): 14.5 million shares expect to price between $17 and $19, through Barclays and Deutsche Bank.

·   ContraFect (NASDAQ: CFRX): expects to price 3.6 million shares between $5 and $6 through Maxim.

·   El Pollo Loco (NASDAQ: LOCO): 7.2 million shares expected to price between $13 and $15 through Jefferies, Morgan Stanley, and Baird.

·   Innocoll (NASDAQ: INNL): 5.35 million shares, expected to price between $13 and $15, through Piper Jaffray and Stifel.

·   Ocular Therapeutix (NASDAQ: OCUL): expects to price 5 million shares between $14 and $16 through Morgan Stanley, Cowen and Company, and RBC Capital.

·   Orion Engineered Carbons (NYSE: OEC): The biggest IPO for the week expects to price 18 million shares between $21 and $24 through Morgan Stanley and Goldman Sachs.

Disclosure: At the time of this writing, the author does not hold positions in the mentioned securities.

Posted-In: 2014 IPOs IPOsNews IPOs Best of Benzinga

 

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