As we move deeper into the second half of the year, we're seeing a robust IPO market that has been able to shake off 2012's Facebook IPO shame.
So far this year there have been 116 debut offerings, the strongest pace since 2007.
As Money Morning Executive Editor Bill Patalon explained earlier this week in his Private Briefing investment service column, the IPO market in 2013 is "white hot."
From Bill's analysis: The market has locked and loaded on about $4 billion in U.S. IPOs so far this year, Bloomberg News reports. At that pace, companies "going public" would raise the most this year since at least 1999, the financial news service says.
The best part of 2013's IPO market strength: the aftermarket performance has been strong with many deals more than doubling after the initial offering.
That's why the IPO calendar is still crowded, giving investors plenty of options for more profit plays from these fast-growing companies.
Upcoming Companies on the 2013 IPO Calendar
A notable deal this week coming to the U.S. markets from overseas is Franks International.
Franks is a 75-year-old oil and gas equipment company based in the Netherlands. The company supplies engineered tubular products that are used to provide a conduit for oil and gas to reach the surface in the drilling process. New techniques like horizontal drilling and deeper offshore drilling have increased the need for highly complex and technical tubular products throughout the industry.
The company notes in the prospectus that its highly engineered products currently have 104 U.S. patents and 136 related international patents. It also has 37 U.S. patent applications pending and 111 related international patent applications pending.
The company is seeing strong numbers, with revenue growth of 45% and EBITDA growth of 79% on the year ended Dec. 31, 2012. About 45% of revenue was derived from outside the United States, and almost 70% came from the offshore and deep-water drilling markets - the industry's fastest-growing segment. Franks' market share in deep-water tubular products is 29% making them a dominant force in the industry.
Franks International will be pricing 30 million shares between $19 and $21 on Friday, Aug. 10. Barclays, Credit Suisse and Simmons & Company are joint mangers of the $600 million deal. Once the offering is complete the shares will trade with the symbol FI.
Now we move on to a hot offering in the healthcare industry...
On Aug. 14 we will see a private equity-led IPO when Clayton Dubilier & Rice LLC sells part of its large physician outsource company Envision Healthcare to the public.
Envision operates through two divisions: EmCare offers physician services including emergency, anesthesiology, hospitalist/inpatient care, radiology, tele-radiology and surgery; AMR is a leading provider and manager of community-based medical transportation services, including emergency, non-emergency, managed transportation, fixed-wing air ambulance and disaster response. AMR employs more than 12,000 paramedics and emergency medical technicians,
The company expects to benefit from a strong trend towards outsourcing in the healthcare industry. Recent changes in healthcare laws expand the market for outsourcing to reduce costs and improve patient care.
The company serves over 2,100 communities currently and is one of the largest companies in what is a highly fragmented industry right now. The company has been able to grow in a time when most were stagnant with revenue improving by more than 8% annually since 2008 while EBITDA increased by an average of more than 13%.
The company will offer 35 million shares between $20 and $23 a share and the offering will be jointly managed by Goldman Sachs, Barclays, BofA Merrill Lynch and Citigroup. Upon completion the shares will trade with symbol EVHC.
Next week we will also see the IPO of Third Point Reinsurance Ltd.
Although technically a reinsurance company, Third Point Re will basically serve as a source of capital for hedge fund manager Daniel Loeb. Using a reinsurance company as a permanent source of capital has been done by other investors including David Einhorn of Greenlight.
Should the company successfully manage the risks of the reinsurance business, and Loeb continues to perform at the very high level he has achieved over the past decade, investors could be rewarded handsomely over the long run for investing in Third Point's venture.
The management team will be led by John R. Berger, a reinsurance industry veteran with over 30 years of experience, the majority of which was spent as the principal executive officer of three successful reinsurance companies. In the prospectus the firm notes that the asset management will be done by Loeb in the same manner as his hedge funds.
It also notes that Third Point Partners L.P, has reported a compounded annualized return of approximately 21.0% from its formation in June 1995 through December 2012 and 17.7% for ten-year periods ended December 31, 2012. The combination of experienced management on both sides of the business should bode well for investors in the offering.
Third Point Re will be offering 22.2 million shares between $12.50 and $14.50 a share in an offering managed by JPMorgan, Credit Suisse, Morgan Stanley, BofA Merrill Lynch and Citigroup. Upon completion the shares will trade with the symbol TPRE.
IPO investing is usually left for the rich, but there are ways you can cash in if you know the right rules. That's why Money Morning's Bill Patalon just outlined the best ways to profit in this booming IPO market: Unlocked: The Fastest-Growing Companies in America