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The IPO market was stung this past week as the largest deal since Snap Inc. opened with a flop.
ADT Inc. (ADT) downsized its offering from 111.1mm to 105.0mm shares and priced at $14.00 or three-dollars below the initial $17-$19 range. The cuts were not enough to appease investors as the heavily retail-allocated deal opened (albeit it varies by who you talk to after the fact) at $12.65 for a loss of 9% at first trade. A late morning ‘rally’ (if you want to call it that) to $12.97 was sold off into the close as ADT finished the opening session near its lows. It is our opinion that the performance of ADT will be a thorn in the side of future PE-backed deals- at least in the short term. Companies of this nature that attempt to go public with massive debt and a quick turnaround from the time of acquisition by the sponsor will likely be scrutinized.
The other two deals this week fared much better. Americold Realty Trust (COLD) upsized its offering from an initial share count of 24.0mm shares to a final result of 45.3mm shares and priced at the high-end of the range, $16.00. COLD opened at $17.50 for a gain of 9.4% at first trade. The offering traded held steady in its opening session and finished Friday near its highs.
The best performing deal of the week was Nine Energy Service (NINE) marking a win for the energy sector for the second straight week. NINE priced a full-size deal at the high-end of the range, $23.00, and opened with a $1.00 premium. NINE traded as high as $29.00 on its opening day for a 26.1% return at top-tick.
Looking ahead to this week there are ten deals on the schedule (see below).
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