Last week saw some IPO success with Bats (BZX: BATS) pricing above expectations. The exchange saw a 21% pop in its first day of trade and the media largely forgave Bats' botched IPO attempt back in 2012. The market will be tested again this week with three additional large, established businesses coming to market. If all three price successfully, this would provide some much needed momentum for the IPO market heading into May and June which are two of the most active months for the past ten years. Historically those two months average 15+ deals a month.
This weeks schedule:
MGM Growth Properties (NYSE: MGP) is offering an initial portfolio of 10 gaming properties, primarily located on The Strip. These properties would generate initial annual rent of $550 million. The REIT is being carved out of MGM Resorts and will carry debt. It plans an initial dividend of $1.43 per share, yielding 7.3% at the midpoint.
American Renal Associates (NYSE:ARA) which is led by its two founders has grown from one clinic in 2000 to 192 clinics at the end of 2015. American Renal plans to open 32 new clinics over the next two years. Analysts note that while the company is highly levered, the nature of the business provides steady revenues with low volatility.
Lastly, SecureWorks (NASDAQ: SCWX) while still unprofitable, analysts agree that it has maintained strong growth and continues to narrow cash burn relative to losses. For the fiscal year ended January 29, 2016, revenue increased 29.5% and cash flow from operations was $-9.8 million compared to net loss of $-72.4 million. If successful, it will be the year's first tech IPO.