So far for the month of July the IPO market can claim success in raising over $180 million. While it doesn't put July on track to break any records, analysts are still optimistic overall. This week investors are getting a little more excited as two large and profitable companies are expected to price their IPO's. If they are successful, that will bring the July total from a small $180 million to over $1.5 billion!
Of the two companies expected to price this week, one is an international company. It's a 5-year old Japanese mobile messaging app with secular growth that plans to dual-list in Tokyo and New York. The other company is almost 100% US. Its a 70-year old company in the defensive space with positive cash flow and a dividend yield. While this may sound attractive we should note that the company has offered very little in the way of growth. .
LINE (NYSE: LN) is the long-awaited "spin off" from Korea's Naver. They are looking to raise $1.1 billion next week by offering a total of 35 million shares at a range of $28.50 - $32.50. They will do this by offering 22 million ADSs on the NYSE and 13 million shares on the Tokyo Stock Exchange. According to their filings, the company has 218 million monthly active users in Japan, Taiwan, Thailand and Indonesia. Although the company faces competition from Facebook (NYSE: FB) and Tencent Holdings, it is still the dominant messaging app in Japan.
The company is set to price on Monday, July 11, however due to listing rules in Tokyo, trading will not begin until Thursday in the US and Friday in Japan. At the current midpoint (the final midpoint will be set on Monday), LINE looks to be the largest tech IPO of 2016 and the largest US-listed tech IPO since Alibaba raised $22 billion in 2014.
AdvancePierre Foods Holdings (NYSE: APFH) is the yield play we mentioned above. The company plans to raise $400 million on the NYSE next week offering 18 million shares at a range of $20 - $23. According to their filings, the company operates in the stable foodservice sector and has leading market share in its key product groups, making and distributing over 2,600 SKUs of ready-to-eat sandwiches and sandwich components, entrees and snacks. Its largest customers include national food distributors Sysco (NYSE: SYY) and recent IPO US Foods (NASDAQ: USFD). It expects to price next Thursday, July 14.