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

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 OEC, the largest IPO, expects to price its 18 million share IPO between $21 and $2,4 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.”

Related: Will Trupanion's New Pet Insurance IPO Succeed?

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 towards 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 SPKE: Expects to issue 3 million shares between $19 and $21 through Baird and Stifel, with an unknown offering date this week.

·   Pfenex 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 ATRA: Expects to issue 5 million shares between $14 and $16, through Goldman Sachs and Citigroup.

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

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

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

Friday, July 25

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

·   ContraFect CFRX: Expects to price 3.6 million shares between $5 and $6 through Maxim.

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

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

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

·   Orion Engineered Carbons 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.