PwC’s Deals Practice - Capital Markets Watch

PwC’s Deals Practice - Capital Markets
Watch
Capital Markets activity for the week
Welcome to PwC's Capital Markets Watch weekly for the three week period ending Thursday, January
7, 2016. This snapshot of the IPO and the high-yield debt markets in the US includes issuances for the past
three weeks and a look forward. We hope you find the information helpful in staying up to date on new
issuance activity. Please reply to this email if you would like to subscribe others to this weekly email.
For companies considering an IPO or high-yield debt offering, it is useful to understand how quickly
windows of opportunity can open and close, making it important to be well-prepared to enter the market
when that moment arrives. Having solid economics, strong fundamentals, and a well prepared story to
market can provide a great foundation for a successful offering.
Summary:
1 IPO priced raising $8m
2 high-yield debt issuances for $1bn
IPO Market: Amid a highly volatile global macro-economic and geopolitical environment which has seen
broader US equities decline by 5% in the first week of January, the 2016 US IPO market has yet to see any
pricing activity, with only a single uplisting IPO being priced over the past 3 weeks. The short-term outlook
for IPOs is muted, with only one industrial IPO on the calendar. However, longer term confidence in the IPO
market is being demonstrated by the 11 new filings during the first week of 2016 following strong filing
activity by 6 companies in the last 2 weeks of December 2015, again led by the healthcare sector as biotech
companies continue their strong momentum.
High-Yield Debt Market: The 2016 high-yield debt market started slowly with only 2 new issuances as
investors eyed similar concerns around the global environment that impacted the equity markets, in addition
to uncertainty about US Fed monetary policy. The high-yield debt pipeline, however, remains full with 16
companies expected to raise nearly $28 billion, led by Dell and Western Digital who represented half of the
pipeline's proceeds. Secondary high-yield debt markets remained relatively stable despite the broader
volatility.
Consumer sector: 1 IPO priced raising $8m, No high-yield debt issuances
IPO pricings
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Naked Brand Group (Innerwear) filed publicly in Sep 2015, raised $8m - priced within the range traded on the NASDAQ on Dec 18
IPO filings
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OTG EXP (airport restaurants) filed publicly for $100m on the NASDAQ
High-yield debt offerings upcoming
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Media General (broadcasting) is expected to issue $1,000m in notes
Pinnacle Entertainment (casinos & gaming) is expected to issue $300m in secured bridge notes
Pinnacle Foods (packaged foods) is expected to issue $350m in senior notes
TreeHouse Foods (packaged foods) is expected to issue $1,050m in unsecured bridge notes
Energy sector: No IPOs priced, No high-yield debt issuances
High-yield debt offerings upcoming
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Energy Transfer Equity (oil & gas) is expected to issue $2,000m in notes
Financial sector: No IPOs priced, No high-yield debt issuances
IPO filings
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Grupo Supervielle (bank holding company) filed confidentially in Sep 2015, filed publicly for $100m
on the NYSE
High-yield debt offerings upcoming
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Gaming and Leisure Properties (REIT) is expected to issue $2,700m in unsecured bridge notes
Healthcare sector: No IPOs priced, No high-yield debt issuances
IPO filings
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Audentes Therapeutics (biotechnology) filed confidentially as an EGC in Nov 2015, filed publicly for
$86m on the NASDAQ
Bavarian Nordic (novel vaccines), currently listed on the NASDAQ Copenhagen, filed confidentially
as an EGC in Oct 2015, filed publicly for $86m on the NASDAQ
Cancer Prevention Pharmaceuticals (oncology therapeutics) filed confidentially as an EGC in Sep
2015, filed publicly for $30m on the NYSE MKT
Corvus Pharmaceuticals (biopharmaceuticals) filed confidentially as an EGC in Nov 2015, filed
publicly for $115m on the NASDAQ
Editas Medicine (biotechnology) filed confidentially as an EGC in Oct 2015, filed publicly for $100m
on the NASDAQ
Proteostasis Therapeutics (novel small molecule therapeutics) filed confidentially as an EGC in May
2015, filed publicly for $86m on the NASDAQ
Pulse Biosciences (medical devices) filed publicly as an EGC for $20m on the NASDAQ
Reata Pharmaceuticals (biopharmaceuticals) filed confidentially as an EGC in Oct 2015, filed publicly
for $80m on the NASDAQ
Spring Bank Pharmaceuticals (biopharmaceuticals) filed confidentially as an EGC in Aug 2015, filed
publicly for $58m on the NASDAQ
Syndax Pharmaceuticals (biopharmaceuticals) filed confidentially as an EGC in Aug 2015, filed
publicly for $86m on the NASDAQ
Tabula Rasa Healthcare (healthcare technology) filed confidentially as an EGC in Sep 2015, filed
publicly for $115m on the NASDAQ
TiGenix NV (biomedical research), currently listed on the Euronext Brussels, filed confidentially as
an EGC in Oct 2014, filed publicly for $58m on the NASDAQ
Visterra (biopharmaceuticals) filed confidentially as an EGC in Nov 2015, filed publicly for $69m on
the NASDAQ
IPO withdrawals
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SurgiQuest (minimally invasive surgery technology)
21st Century Oncology (cancer treatment centers)
High-yield debt offerings upcoming
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Acadia Healthcare (healthcare facilities) is expected to issue $390m in unsecured bridge notes
Lannett (pharmaceuticals) is expected to issue $250m in senior notes
Industrial sector: No IPOs priced, 1 high-yield debt issuance for $440m
IPOs upcoming
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Shimmick Construction (heavy civil construction) filed confidentially as an EGC in Sep 2015, filed
publicly in Nov 2015, most recently filed to raise $75m on the NASDAQ - expected to price the week
of Jan 11
High-yield debt issuances
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Kraton Performance Polymers (chemicals) issued $440m 144A for life 11.25% (CCC+) 7-year
unsecured senior notes to back the acquisition of Arizona Chemical
High-yield debt offerings upcoming
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GCP Applied Technologies (construction materials) is expected to issue $625m in senior notes
Technology sector: No IPOs priced, 1 high-yield debt issuance for $450m
IPO filings
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Acacia Communications (ultra-high speed fiber optic transmission) filed confidentially as an EGC in
Aug 2015, filed publicly for $125m on the NASDAQ
Nutanix (enterprise cloud platform) filed confidentially as an EGC in Jul 2015, filed publicly for
$200m on the NASDAQ
High-yield debt issuances
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Microsemi (computers & technology) issued $450m 144A for life 9.125% (B+) 7-year unsecured
senior notes to back the acquisition of PMC-Sierra
High-yield debt offerings upcoming
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Computer Sciences (information technology) is expected to issue $2,000m in notes
Dell (technology hardware & peripherals) is expected to issue $9,000m in notes
Endurance International (internet software & services) is expected to issue $350m in notes
Lightower (fiber networking) is expected to issue $460m in unsecured bridge notes
RealD (3D technology) is expected to issue $300m in secured bridge notes
Solera (application software) is expected to issue $1,800m in notes
Western Digital (data storage solutions) is expected to issue $5,100m in secured and unsecured notes
Stories of the week:
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New jobs growth in December 2015 reached a 10-month high of 292,000, exceeding the increase of
211,000 in November, leaving the unemployment rate at 5%, according to the Department of Labor
Q3 US GDP was revised downwards to 2%, a significant slowdown compared to the 3.9% recorded
for Q2 2015, according to the Department of Commerce
On Thursday, the People's Bank of China devalued the yuan to its lowest level since March 2011 alongside this devaluation, China's stock market dropped 7% in about 30 minutes on Thursday,
triggering the now-suspended "circuit-breaker" mechanism to close the markets, marking the
shortest trading day in Chinese history
In addition to volatility in the US equities markets, global markets were also impacted by volatility,
with the Stoxx Europe 600 index down 5% and the Nikkei 225 index down 7% for the week
Oil prices dropped to 13-year lows on Thursday
Our insights:
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PwC's Deals Blog Q4 IPO Watch: Investors Pressure IPOs, Returning Market to a More Normalized
Pace. PwC's Deals Practice is excited to announce our new PwC's Deals Blog to share our point of
view and keep you up to date on the latest dealmaking trends. Subscribe for our latest insights.
Click here to read our latest issue of In the loop, "Spin-off transactions - Governance considerations,"
which discusses how spin-offs have seen a resurgence in recent years.
2015 SEC comment letter trends - Our 2015 SEC comment letter trends publications provide a
comprehensive analysis of recent SEC staff comments to assist you in understanding some of the key
trends that are relevant to companies in your sector. Click here to read more.
Denver - Don't miss PwC's IPO Readiness Seminar on January 13, where a panel of multidisciplinary
experts will walk through the process of going public and what to know about being a public
company. Learn more and register at https://meetpwc.cvent.com/IPOReadinessDenver.
Salt Lake City - Join us on January 14 for panel discussions about planning a successful IPO. Learn
more and register at https://meetpwc.cvent.com/IPOReadinessSaltLakeCity.
To view previous Capital Markets Watch weekly snapshots, please click here.
For more insights and publications on successfully executing an IPO, visit our website, contact me or a PwC
partner in your region.
Regards,
Author:
Derek Thomson
Director, Capital Markets Research Leader
PwC's Deals Practice
[email protected]
Henri Leveque
Partner, Capital Markets & Accounting Advisory Services Leader
PwC's Deals Practice
[email protected]
Neil Dhar
Partner, Capital Markets Leader
PwC's Deals Practice
[email protected]
Mike Gould
Partner, Public Offerings Leader
PwC's Deals Practice
[email protected]
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