Moin
BATS Global Markets Inc. Registered Shares DL -,01
15.04.16 22:00:00 Uhr
23,00 USD+21,05% [+4,00]
7BTA
US IPO Weekly Recap: Stock exchange Bats flies up 21% in the year's largest IPO
4/15/16 Analyst IPO Market Commentary
The US IPO market shifted into gear this week with Bats Global Markets' (BATS) public debut. Its positive initial reception serves as an encouraging sign for IPOs on the calendar and pipeline.
Bats' significance is highlighted as the year's:
•First non-healthcare IPO
•Largest IPO by deal size ($253 million) and market cap ($1.85 billion)
•Best first-day pop (+21%)
•First of seven attempted IPOs with operating income to complete an IPO
Bats Global Markets raised $253 million, 25% more than anticipated, by pricing an upsized offering at $19, the high end of the range. Four years after a trading glitch disrupted its first IPO attempt, the company became the first corporate listing on its own Bats BZX Exchange. A market leader with the #2 position in US equities and #1 in Europe, Bats boasts both profitability (6% net margin) and growth (+12% organic rate).
The uptick in IPO activity coincides with improving market conditions. The Renaissance US IPO Index traded up 3.4% this past week, while S&P 500 gained 1.6%. The VIX Volatility Index has remained below 20 for most of the past two months, and below 15 for most of the past month.
Three new filings: A large LBO, a cutting-edge biotech and a regional bank
Three companies joined the US IPO pipeline this past week, bringing April's filing count up to eight, representing the most activity since early January. Oaktree Capital's food manufacturer AdvancePierre Foods (APFH.RC) filed for an IPO that we estimate could raise $500 million. On the heels of a new partnership with Regeneron, Intellia Therapeutics (NTLA) filed to raise $120 million; it is one of three CRISPR gene editing biotechs alongside recent IPO Editas Medicine (EDIT; +150%) and CRISPR Therapeutics (CRSP.RC). Last, Illinois-based Midland States Bancorp (MSBI), a bank with $2.9 billion in assets, filed to raise $120 million.
The week ahead could raise $1.3 billion
Three deals are on the IPO calendar to raise nearly $1.3 billion in the week ahead, including Las Vegas REIT MGM Growth Properties LLC (MGP; $975mm deal size), LBO'd dialysis clinic operator American Renal (ARA; $161mm) and cybersecurity services provider SecureWorks (SCWX; $149mm). LBO'd casino company Red Rock Resorts (RRR) launched on Friday to raise $531 million in the following week.
Look out for these potential launches
Now that IPO activity is picking up, we believe some of the most likely IPO launches include: Atkore International (ATKR), Nutanix (NTNX), Gypsum Management (GMS), US Foods (USFD), McGraw-Hill Education (MHED), PSAV (PSAV) and Tactile Systems (TCMD).
IPO Market Snapshot
The Renaissance IPO Indices are market cap weighted baskets of newly public companies. The Renaissance IPO Index is down 5% year-to-date, while the S&P 500 is up . Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Alibaba (BABA), Synchrony Financial (SYF) and Citizens Financial Group (CFG). The Renaissance International IPO Index is down 4% year-to-date, compared to -2% for ACWX. Renaissance Capital’s International IPO ETF (NYSE: IPOS) tracks the index, and top ETF Holdings include NN Group and Aena S.A. To find out if this is the best ETF for you, visit our IPO Investing page.
Keywords / Tickers: BATS
http://www.batsglobalmarkets.com/
Bats Faces Its Last Hurdle in $253 Million IPO: Start Trading
April 15, 2016 — 11:00 AM CEST
IPO priced at $19 Thursday, at high end of projected range
Exchange tried to go public in 2012, but its software failed
It’s a case of deja vu: Bats Global Markets Inc. has lined up new shareholders and the price of its initial public offering is set.
Now, Bats is scheduled to start trading Friday on its own exchange -- the same position the company found itself in 2012 when it first attempted to go public. A software error at Bats kept the stock from trading and halted Apple Inc., leading the exchange operator to cancel the IPO outright. Four years later, the exchange operator is taking pains to ensure its shares get off to a smooth start this time.
“Reputationally, if they don’t pull it off, I don’t know if they’ll have another chance,” said Paul Gulberg, an analyst at Portales Partners LLC. “In terms of going public, it’s important to get it right.”
Bats’s shares priced for $19 apiece Thursday night, at the high end of the estimated range. That valued the company at $1.8 billion. Existing investors sold 13.3 million shares, which was more than planned after demand for the stock outstripped the 11.2 million originally offered by 20 times, according to a person familiar with the matter.
The exchange operator explicitly mentioned the botched 2012 IPO attempt in the risk-factors section in its new offering prospectus, saying it’s made changes to avoid a similar knock on its reputation.
50,000 Tests
“We have since investigated that incident and adopted various policy and procedure enhancements,” the filing said. However, “there can be no guarantee that we will not suffer a similar technological failure in the future that damages our reputation and results in increased regulatory scrutiny.”
Bats also highlighted its testing to investors on its IPO roadshow. It ran more than 50,000 tests of its auction process this year and can handle volume three times greater than Nasdaq’s stock exchange faced in Facebook Inc.’s 2012 IPO, according to a person familiar with the matter.
Aside from its own listing under the ticker BATS, the Lenexa, Kansas-based exchange group hasn’t hatched plans to court corporate IPOs, marking a strategic divergence from competitors NYSE Group Inc. and Nasdaq Inc. Bats has focused instead on luring listings of exchange-traded funds, an effort it stressed in its presentation to potential investors. Two new ETFs issued by State Street Global Advisors debuted on Bats’s trading platform on Thursday.
Bats on Thursday raised $253 million for its investors, including Bank of America Corp., KCG Holdings Inc. and Goldman Sachs Group Inc. Bats didn’t sell any of its stock and won’t receive any proceeds.
Industry M&A
The IPO comes at a time of consolidation for the exchange industry. Lately, it’s bought or be bought as the biggest exchanges add to their extensive portfolios and their smaller rivals snap up market share.
The biggest global players are jockeying over a buyout of London Stock Exchange Group Plc. Deutsche Boerse AG has proposed a takeover valued at about $13 billion, which would be one of the biggest deals in the industry’s history. Intercontinental Exchange Inc. is considering its own LSE bid.
Bats already owes its growth in part to acquisitions. The company vaulted ahead of Nasdaq to become the second-largest operator of U.S. stock exchanges after it bought fellow market operator Direct Edge in 2014. Bats also made its first foray into the foreign exchange market by buying its Hotspot FX venue from KCG last year.
Deal-making may be the order of the day for exchanges seeking quick growth, said Michael Wong, an analyst at Morningstar Inc.
“One of the themes that many of the exchanges have talked about is the competition for relevance: That there will be just one handful of globally relevant exchanges in the world,” Wong said. “The exchange industry will probably become bifurcated between the global and the regional exchange groups.”
