One of the worries accompanying the spike in market volatility of the past couple weeks was that the IPO market would feel some pressure, too. However, things have held up fairly well. While Colony American Homes postponed its offering, so far, it remains an isolated case — investors might just be skeptical about the leasing business model for single-family homes. Also, there are concerns that the IRS might get tougher on regulations for applying to become a real estate investment trust.
Despite all this, two offerings that did quite well last week: Textura (TXTR, +39%) and LightInTheBox (LITB, +32%). Only RCS Capital (RCAP) had an iffy performance, off by about 3%.
For the upcoming week, three companies are ready to come public, with major global fragrance player Coty (COTY) likely to see the most attention:
Aratana Therapeutics
Aratana Therapeutics (PETX) is a development-stage biotech company that focuses on pet therapeutics. The strategy is to in-license proprietary compounds — from human biopharma companies — to create new drugs. This helps to greatly improve the potential effectiveness of the treatments.
So far, the leading drugs in development target pain and inflammation for osteoarthritis in dogs, as well as inappetence in both cats and dogs.
PETX has a strong team with lots of experience in the pet-med business. For example, its chief scientific officer has been involved in the development of 20 drugs for animal health, and its chief commercial officer has launched 22 products, including Rimadyl, a pain treatment for dogs.
Aratana plans to issue 4.3 million shares on the Nasdaq at a range of $11 to $13. Lead underwriters include Stifel Nicolaus and Lazard Capital Markets (LAZ).
Coty
Coty (COTY) is the No. 2 player in the global market for fragrances, sporting brands like Calvin Klein, adidas, Davidoff, Playboy and Sally Hansen. The company has been particularly adept with making juicy returns from celebrity brands, such as for Jennifer Lopez (Glow), Beyonce (Pulse) and Lady Gaga (Fame).
To expand its footprint in emerging markets, Coty attempted a $10.7 billion takeover for Avon Products (AVP) last year, though Avon declined. Nonetheless, Coty’s business continues to do well. From fiscal 2010 to 2012, revenues grew at an average rate of 16% to $4.6 billion, and adjusted operating income nearly doubled from $284.4 million to $535.9 million.
Coty plans to issue 57.1 million shares on the New York Stock Exchange at $16.50 to $18.50. The lead underwriters include BofA Merrill Lynch (BAC), JPMorgan (JPM), Morgan Stanley (MS), Barclays (BCS), Deutsche Bank (DB) and Wells Fargo (WFC).
Gigamon
Gigamon (GIMO) develops network appliances that manage Internet traffic, handling such things as monitoring, analysis and compliance. The growth in cloud computing, mobile and Big Data has fueled demand for this kind of technology.
Since its founding in 2004, GIMO has sold its products to more than 1,000 end-user customers. They include seven of the top 10 U.S. banks, six of the top 10 wireless service providers and six of the 10 largest managed healthcare companies.
That has helped spark a strong growth ramp. From 2010 to 2012, revenues spiked from $46.5 million to $96.7 million, and the company managed to turn a $7.5 million profit last year.
Gigamon plans to issue 6.8 million shares on the New York Stock Exchange at a range of $18 to $20. The lead underwriters include Goldman Sachs (GS), BofA Merrill Lynch and Credit Suisse (CS).
Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.
